This text compares my inventory portfolio with an equal funding in a Nifty index fund and the Nifty 100 Low Volatility 30 TR index. We submit this comparability every month. Earlier than we start, new readers want to understand the context of those investments.
Replace: We lately added a brand new instrument to the freefincal investor circle – Establish shares with earnings energy with this new instrument. See outcomes: Earnings energy valuation of my portfolio shares.
I began direct fairness investing solely after attaining a snug degree of economic independence and making certain my son’s future portfolio within reason safe. On the time of writing, its worth is about 9.80% of my fairness MF retirement portfolio and 5.79% of my whole retirement portfolio.
Subsequently, I invested with out the concern of efficiency. There isn’t a experimentation or analysis within the inventory choice technique. That’s typically a waste of time and, due to this fact, a waste of true wealth = time. I proceed to put money into the identical manner. Loads of cash will be made in low-volatile, sturdy blue-chip shares.
Warning: No a part of this text must be handled as funding recommendation. I began investing in shares after my goal-based investing was in place. Readers should recognize that I began investing in shares after hitting the brink of economic independence. So there isn’t a stress for me after I decide shares the way in which talked about right here. Please do your analysis and purchase as per your circumstances.
My objective is to purchase shares with virtually zero analysis. I additionally proceed to put money into mutual funds as standard.
I’ve bought mutual funds each month, no matter market ranges, and I shall attempt to repeat this uninteresting technique for direct fairness if I’ve the cash. Additionally, see Fourteen Years of Mutual Fund Investing: My Journey and Classes Discovered.
Time isn’t just cash; Time is unquantifiable cash. Time wasted in inventory or mutual fund evaluation, the precise time to speculate, and so forth., is an unquantifiable loss. So, I goal to purchase a fund or inventory inside a minute.
Zero ability is concerned in any facet of my portfolio. I compensate for the lack of know-how with self-discipline. Randomness (aka luck) performs a large position within the return numbers (or lack thereof) under.
After evaluating the efficiency of low-volatility indices, I gained confidence in my potential to put money into shares. I advised myself I’d not do any inventory evaluation or analysis. I’d simply do a fast examine of firm well being, a quick volatility evaluate, and purchase. If I can’t purchase a inventory inside a couple of minutes, I’m losing money and time (in that order).
The inventory portfolio is a part of my retirement portfolio basket as a dividend supply. It might function an emergency fund as a final resort. Perhaps I’ll discover one other use for it sooner or later.
In FY 2020-21, this portfolio’s whole annual dividend earnings (pre-tax) was about 30% of my present month-to-month bills. In FY 2021-2022, it elevated to about 56%. In FY 2022-23, it turned about 70%. In FY 2023-2024, it was about 88%. In FY 2024-2025, it was about 100%.
The subsequent objective is to obtain one month’s bills as a complete quarterly dividend (post-tax!). I don’t consciously reinvest dividends. Youthful individuals ought to. It issues little so long as the general funding made every month retains rising wholesome: How ten years of monitoring investments modified my life.
This inventory portfolio is a part of my total retirement portfolio. I’m striving to construct the ideally suited retirement portfolio. Additionally, see construct a second earnings supply that can final a lifetime.
Inventory choosing technique
- Select shares with little or no analysis or evaluation.
- Select low-volatility shares with sound monetary well being (low debt is a minimal requirement)
- Select shares that commerce near their all-time highs (approx momentum indicator). See, for instance, A listing of shares which have traded near their “all-time excessive:
- Don’t be afraid to choose costly shares at an absolute value and valuation. Notice: Worth investing might sound clever and engaging, however it’s riskier. I neither have the age to tackle such a danger nor the qualitative insights to choose shares that the market has shunned, however they are going to be found sooner fairly than later. To understand the danger related to worth investing and why it’s extra qualitative than quantitative, see this evaluation: Is it time to exit ICICI Worth Discovery & Quantum Lengthy Time period Fairness?
- When doubtful, ask your spouse when she is about to go to sleep within the afternoon.
- Don’t concern dividends (or dividend taxation).
- What issues primarily is corporate well being. Whether or not it’s a dividend payer or not is incidental. It is not sensible to say no to an organization as a result of it pays enormous dividends! It is not sensible to promote a inventory as a result of it has an elevated dividend payout.
- All inventory buyers over ten years will obtain dividends, no matter whether or not they prefer it. There isn’t a alternative, not like mutual funds.
- Dividends usually are not “additional” relating to returns/efficiency however characterize actual revenue. It may well function a supply of earnings for an older investor, Constructing the perfect retirement portfolio. Youthful buyers won’t ever perceive this, and that’s positive.
- Peaceable sleep is one of the best type of realised positive aspects, therefore the significance of low volatility and cheap momentum to enterprise well being (not all shares in my portfolio will examine all these bins).
- That is the archive of earlier portfolio updates.
Associated movies: purchase your first inventory with out breaking your head
Inventory Portfolio Evaluation
Replace: We lately added a brand new instrument to the freefincal investor circle – Establish shares with earnings energy with this new instrument.
See outcomes: Earnings energy valuation of my portfolio shares
That is the portfolio evolution.
As of Could twenty first 2025, all outcomes are computed utilizing our Google Sheets-based inventory and MF portfolio trackers.
Inventory portfolio weights and returns as of Could twenty first. 2025Please observe: (1) Though investments began in 2014, a lot of the cash invested is from July 2020.
(2) I didn’t make investments between November 2021 and April 2022 attributable to different priorities. On the time of writing, the final funding was made in October 2022. The portfolio weights have drifted naturally. After I can make investments, I attempt to chase momentum inside the portfolio and put money into shares which have gained essentially the most since I began investing in them.
- Dividend Return = Complete Dividends divided by Complete Funding
- Capital Achieve (CG) Returns = Complete CG divided by Complete Funding
- Complete Return = Dividend Return + CG Return.
- CAGR = ( 1 + Complete Return ) ^ ( 1 / Avg. Years) – 1
- The common funding period = 4.51 years for your complete portfolio. That is the typical of all buy funding tenures weighted by the investments.
- CAGR is computed provided that the typical years = > 1. XIRR must be taken critically provided that the typical variety of years is => 1.
- All returns are earlier than tax.
- The portfolio is in contrast with an identical investments into UTI Nifty 50 Index Fund (direct plan!)
Many individuals and portals mistakenly deal with dividends as money payouts whereas calculating XIRR. This isn’t the universally accepted tutorial and regulatory conference. Solely purchases and redemptions by the investor must be used within the XIRR calculation. Dividends must be handled appropriately as reinvested (a rule additionally mandated by SEBI), and different company actions must be handled appropriately. The freefincal inventory tracker aligns with SEBI rules for all company actions (dividends, splits, buybacks, and so forth)
Comparability with benchmark
The Nifty 100 low vol 30 is a greater benchmark for this portfolio. Nevertheless, we will solely examine it with the index, not the ETF (from ICIC), which was launched solely in 2017.
- Inventory portfolio (absolute return)* 36.79%
- UTI Nifty index fund (absolute return)* 81.30%
- Nifty Low Vol 30 TRI (absolute return)* 93.09%
- Inventory portfolio CAGR 7.18%
- UTI Nifty Index fund CAGR 14.07%
- Nifty Low Vol 30 TRI CAGR 15.68%
- Inventory Portfolio XIRR (incl all company actions like dividends and splits) 7.72%
- UTI Nifty Index fund XIRR 15.51%
- Nifty Low Vol 30 TRI XIRR 17.08%
* Complete return and CGAR embrace liquidated holdings (see month-to-month replace archives for particulars).
The underperformance doesn’t hassle me a lot as a result of the inventory portfolio is a small portion of my retirement corpus, and I deal with it as a future earnings supply. I’ve had enjoyable constructing this with no effort and can proceed. Please do your analysis and make investments.
Do share this text with your pals utilizing the buttons under.
🔥Take pleasure in large reductions on our programs, robo-advisory instrument and unique investor circle! 🔥& be a part of our neighborhood of 7000+ customers!
Use our Robo-advisory Software for a start-to-finish monetary plan! ⇐ Greater than 2,500 buyers and advisors use this!
Observe your mutual funds and inventory investments with this Google Sheet!
We additionally publish month-to-month fairness mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility inventory screeners.
Podcast: Let’s Get RICH With PATTU! Each single Indian CAN develop their wealth!
You’ll be able to watch podcast episodes on the OfSpin Media Pals YouTube Channel.
🔥Now Watch Let’s Get Wealthy With Pattu தமிழில் (in Tamil)! 🔥
- Do you’ve gotten a remark in regards to the above article? Attain out to us on Twitter: @freefincal or @pattufreefincal
- Have a query? Subscribe to our e-newsletter utilizing the shape under.
- Hit ‘reply’ to any e-mail from us! We don’t supply personalised funding recommendation. We will write an in depth article with out mentioning your identify when you’ve got a generic query.
Be part of 32,000+ readers and get free cash administration options delivered to your inbox! Subscribe to get posts through e-mail! (Hyperlink takes you to our e-mail sign-up kind)
About The Creator
Dr M. Pattabiraman(PhD) is the founder, managing editor and first creator of freefincal. He’s an affiliate professor on the Indian Institute of Know-how, Madras. He has over ten years of expertise publishing information evaluation, analysis and monetary product improvement. Join with him through Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You will be wealthy too with goal-based investing (CNBC TV18) for DIY buyers. (2) Gamechanger for younger earners. (3) Chinchu Will get a Superpower! for youths. He has additionally written seven different free e-books on varied cash administration subjects. He’s a patron and co-founder of “Price-only India,” an organisation selling unbiased, commission-free funding recommendation.
Our flagship course! Study to handle your portfolio like a professional to realize your targets no matter market situations! ⇐ Greater than 3,000 buyers and advisors are a part of our unique neighborhood! Get readability on the way to plan in your targets and obtain the mandatory corpus regardless of the market situation is!! Watch the primary lecture without cost! One-time cost! No recurring charges! Life-long entry to movies! Cut back concern, uncertainty and doubt whereas investing! Learn to plan in your targets earlier than and after retirement with confidence.
Our new course! Enhance your earnings by getting individuals to pay in your expertise! ⇐ Greater than 700 salaried workers, entrepreneurs and monetary advisors are a part of our unique neighborhood! Learn to get individuals to pay in your expertise! Whether or not you’re a skilled or small enterprise proprietor who desires extra shoppers through on-line visibility or a salaried particular person wanting a facet earnings or passive earnings, we are going to present you the way to obtain this by showcasing your expertise and constructing a neighborhood that trusts and pays you! (watch 1st lecture without cost). One-time cost! No recurring charges! Life-long entry to movies!
Our new guide for youths: “Chinchu Will get a Superpower!” is now obtainable!
Most investor issues will be traced to an absence of knowledgeable decision-making. We made unhealthy selections and cash errors after we began incomes and spent years undoing these errors. Why ought to our kids undergo the identical ache? What is that this guide about? As dad and mom, what would it not be if we needed to groom one potential in our kids that’s key not solely to cash administration and investing however to any facet of life? My reply: Sound Determination Making. So, on this guide, we meet Chinchu, who’s about to show 10. What he desires for his birthday and the way his dad and mom plan for it, in addition to instructing him a number of key concepts of decision-making and cash administration, is the narrative. What readers say!
Should-read guide even for adults! That is one thing that each dad or mum ought to educate their children proper from their younger age. The significance of cash administration and choice making based mostly on their desires and wishes. Very properly written in easy phrases. – Arun.
Purchase the guide: Chinchu will get a superpower in your youngster!
revenue from content material writing: Our new book is for these desirous about getting facet earnings through content material writing. It’s obtainable at a 50% low cost for Rs. 500 solely!
Do you wish to examine if the market is overvalued or undervalued? Use our market valuation instrument (it would work with any index!), or get the Tactical Purchase/Promote timing instrument!
We publish month-to-month mutual fund screeners and momentum, low-volatility inventory screeners.
About freefincal & its content material coverage. Freefincal is a Information Media Group devoted to offering authentic evaluation, stories, opinions and insights on mutual funds, shares, investing, retirement and private finance developments. We accomplish that with out battle of curiosity and bias. Comply with us on Google Information. Freefincal serves greater than three million readers a 12 months (5 million web page views) with articles based mostly solely on factual data and detailed evaluation by its authors. All statements made will likely be verified with credible and educated sources earlier than publication. Freefincal doesn’t publish paid articles, promotions, PR, satire or opinions with out information. All opinions will likely be inferences backed by verifiable, reproducible proof/information. Contact data: letters {at} freefincal {dot} com (sponsored posts or paid collaborations won’t be entertained)
Join with us on social media
Our publications
You Can Be Wealthy Too with Purpose-Based mostly Investing
Revealed by CNBC TV18, this guide is supposed that will help you ask the precise questions and search the proper solutions, and because it comes with 9 on-line calculators, you can even create customized options in your life-style! Get it now.
Gamechanger: Neglect Startups, Be part of Company & Nonetheless Dwell the Wealthy Life You Need
This guide is supposed for younger earners to get their fundamentals proper from day one! It can additionally assist you to journey to unique locations at a low price! Get it or present it to a younger earner.
Your Final Information to Journey
That is an in-depth dive into trip planning, discovering low-cost flights, price range lodging, what to do when travelling, and the way travelling slowly is best financially and psychologically, with hyperlinks to the net pages and hand-holding at each step. Get the pdf for Rs 300 (prompt obtain)