When it comes to equity investing, one of the important questions every investor struggles to find an answer to is how much of the total portfolio money should be allocated to smallcaps, mid-caps and large-caps. Often the fine judgement of portfolio allocation across market capitalisation comes with experience and after studying the risk profile of individual investors. For a conservative investor it is recommended that 90 per cent of the portfolio money allocated for equity investments should be parked in large-caps and the remaining 10 per cent in mid-caps and small-caps. If the investor’s risk profile suggests higher risk-taking ability, in that case the allocation can be 50 per cent in small-caps and mid-caps with 50 per cent in large-caps.
For a moderate risk-taker, the recommended portfolio allocation is 70 per cent in large-caps and 30 per cent in small-caps and mid-caps. If one sticks to the above suggested portfolio allocation derived after a thorough risk profiling is done, chances are the experience in the equity market will be good as the portfolio will be aligned to the risk-taking ability of the individual investors. Now, how does one accommodate micro-cap stocks in a portfolio that shows promise? What are micro-cap stocks and should micro-cap stocks be included in the portfolio at all? It is perceived that micro-cap stocks are highly risky and not for conservative investors. However, for those investors with higher risk-taking ability, micro-cap investing is not untouchable.
Micro-Cap Portfolio Building
Denne historien er fra December 06, 2021-utgaven av Dalal Street Investment Journal.
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Denne historien er fra December 06, 2021-utgaven av Dalal Street Investment Journal.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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How To Invest In An Ageing Bull Market
Bull rallies (periods when stock prices rise) and bear declines (periods when stock prices fall) are natural parts of stock market cycles, but they don't follow a fixed timeline.
Should You Entrust All Your Money To A Single AMC?
If you are a market participant, you have probably heard the quote 'don't put all your eggs in one basket', which suggests diversification. Investors often focus on diversifying across categories like large-cap, mid-cap and small-cap, but they may unintentionally overlook diversification across different AMCs. The question arises: is AMC-wise diversification really necessary? Rakesh Deshmukh takes a closer look at this scenario
Wild Swings Engulf Global Equities
U.S. stock markets experienced significant volatility. An early-week rally pushed the markets to new highs, but this momentum faded, primarily due to weaknesses in the tech sector. The major indices had a mixed finish with, S&P 500 and Nasdaq closed lower, while the Dow recorded a notable gain.
U.S. Elections and China's Economy Hamper Commodities
Commodity markets experienced selling pressure in the last fortnight, driven by uncertainties surrounding the upcoming U.S. presidential elections, concerns about the Chinese economy, and increased agricultural production in Brazil.
Wealth Building For Retirement Through Mutual Funds
Retirement is one of the most crucial and lifechanging phases. It marks a period where maintaining your lifestyle becomes paramount even though your regular income stops.
Mastering Investment with Information Ratio
Information Ratio helps in navigating the complexities of the investment landscape by assessing an active fund manager's performance. And though it has its limitations, it remains an essential part of the finance industry. The article explains what Information Ratio is and how investors can use it as another tool
Plan To Be Financially Independent
Each of us aspires to be financially independent as it ensures having enough resources to be self-sufficient and control our finances.
❝Technology is the new game-changer"
With a new breed of young investors entering the financial markets, it is the use of technology that is increasingly playing a major role in how investments are done and tracked. Anand Radhakrishnan, Managing Director, Sundaram Mutual Fund, shares his opinion about how this factor is turning into a significant tool and how it will shape the strategies of his company
What If Donald Trumps?
The potential election of Donald Trump as president in the U.S. carries significant implications for the Indian equity market. It could lead to changes in the global trade dynamics, in particular affecting the Indian IT sector while also raising inflation levels and leading to yet another revision in the visa programme for Indians who want to work in the US. The article takes a closer look at what may lie in store
Sectoral Gains Make A Mark
Benchmark indices continued their uptrend, reaching new record highs, although the pace has slowed as the broader markets faced selling pressures
