MUTUAL FUND (INDIA) construct
Max 2 different AMC funds in each
1) INDEX (2*3=6_) Sensex Nifty Nifty Next
2) CAPS (2*4=8) Large Mid Small (small %age) Multicap
3) MULTI ASSET (2*1=2) Multi asset
4) SECTOR (2*4-=8) Banking Pharma IT INFRA
5) DEBT (2*3=6) Corp Bond GILT Liquid
Depending on your risk profile the % age in each category above can vary. I prefer once I set the above category, I accumulate in it, rather than jumping into different MFs and categories. The above is 30 funds. You can even make it 15 funds depending on your comfort level with AMC. I prefer to see 5-7 years return (CAGR) and decide/invest accordingly.
If medium term goal is there, once you achieve 50% or more return in a fund, liquidate 75% and put it in debt, as if market goes down when your goal is reached you will have cash flow issues. Start liquidating 3-4 years or if market is in euphoria to debt funds.
If Long term goal, keep investing and the market value becomes basically your EGO to talk how you did well in stock market. You can during Euphoria period or a 50-75% return, liquidate and keep the funds in liquid to invest more when it goes down.
After constructing the above, and recently after MAGA and Trump, I noticed that it is better to diversify your portfolio further. Given that one is not aware of stocks in diff countries, better to stick to investing in Index. Index funds of following countries are advised and up to you to choose this or a better doing Index fund or ETF.
a) MF investing in Europe
b) MF investing in Japan
c) MF investing in China
d) MF investing in USA
e) MF investing in Emerging markets
I chose the above order, primarily because of current POTUS maverick action. One could see wild gyrations, and one could see people worried about their assets in US. Till now the USD is the central currency, but if some other currency replaces USD, it will see a substantial reduction in US investment.
I am totally against Bitcoin, even though I started tracking at 1 or 2 $ to a bit coin as I found no underlying asset or enough confidence in their backers. Mt Gox, Sam Bankmen further eroded my confidence in it. Though as per current price it is around 70,000$.
As I have said in another Blog money need not be the only source of happiness.
