Sunday, 14 September 2014

Portfolio Analysis - September 2014

Well folks, it's now time for the September Portfolio Analysis. For those of you who may have missed the other Portfolio Analysis posts, these are the April and July posts.

So, let's get our hands dirty with numbers immediately.


Figure 1: Portfolio Asset Allocation


  • The PFs continue to decline as I am unable to add funds to this asset. This should get resolved around December as I pump funds into my PPF account for Tax Savings.
  • Nothing noteworthy to comment on the RE asset as this will continue to increase at a pre-defined rate, based on the Amortization of the House Loan.
  • The equity markets have been acting strangely these last couple of months. Subsequent to the last post, the markets underwent a substantial correction and have just rebounded back to reach a new all-time high. I haven't been able to make noteworthy contribution of funds here either, since I had some high value expenses recently, in the form of books, travel expenses and life insurance premium payment.
  • Savings continue to remain at a desirable level, I expect I currently have 4 months of expenses covered.
  • Not much of a change with deposits either, this just contains one RD which adds a minuscule amount automatically every month. I call it my "Rainy Day" account. :D
  • Analysis - The portfolio allocations are looking good, on target in my opinion. The risk-reward ratio matches investor preferences and suitability criteria too. Although, it would be a good idea to reduce the Risk Free component and allocate those funds, mostly to Low Risk and partially to High Risk components. That would really balance the asset allocations out and make it an ideal portfolio. However, currently the Low Risk component aren't presenting a substantial returns advantage over the Risk Free component, and hence it will be a while before this change can be achieved.


Figure 2: Equity Portfolio



We have had a few roller-coaster months in the markets, mostly due to the global pandemonium due to the crises in Iraq and Ukraine, as well as some hiccups due to European economy. Looks like things are settling down again, at least as far as the markets are concerned. The domestic markets made a recovery over the last couple of months and hopefully the trend will continue.

  • Waiting on FSL and ZEELEARN to shoot up. Both the stocks are in the Technology sector and are generally driven by good quarterly results. ZEELEARN gave me a scare when it dropped 20% from my initial buy price, but I averaged it out gradually and it has recovered substantially following the last AGM.
  • GABRIEL has done phenomenally well, it is currently fetching me 100% returns. The auto sector stocks zoomed up recently and this one benefited from the euphoria. It is an auto ancillaries stock. Although, seeing such a fantastic response in this sector makes me wonder why I skipped on picking TVS Motors when I had the chance :(
  • GAYAPROJ is not a stock for the faint of heart. It dove to unnatural levels and has now returned back to my purchase price. Although I'm confident about the stock over the long term, I am considering reducing exposure to the stock. I will have to give some serious thought to this though. Just so you know, it was down 30% from my buy price and has since recovered. I know you are thinking why I was holding on to the stock and waiting for it to drop by 30%, but it's very hard to maintain stop-loss levels on this stock as it highly volatile. Besides, it has tremendous potential for growth.
  • ITC is a defensive, I am not really bothered whether it moves much or not. It's meant to provide stability to my portfolio. Same goes with SUNPHARMA, however that recently spiked up due to great results and is now nearly 40% up from its purchase price. Feels great to see a defensive stock contribute so much to your portfolio :)
  • L&T, RELIANCE and SBIN are all growth stocks, large-caps, meant to be held for long term again. They are primarily result driven and have been performing well. There is a lot of potential for L&T if the construction and manufacturing sectors in India pick up under the new Government. RELIANCE is a slightly longer term pay-off as it is expected to reap rewards 2 years from now, when it starts receiving returns on the investments it has made over the last few years.
  • Analysis - Well, the portfolio continues to outperform the NIFTY index, although the performance was hampered this time around by GAYAPROJ. The risk allocations look good too, I don't think I'd want to change anything there.