I m 46yr old married and only earning person of my family,i have two daughters one is 13 Yrs old and other one is 12 yrs with long term Investment horizon and will transfer the shares to their name once they have majors ,I would like your comments on my monthly SIP Investment of Rs 65,000 started from January 2024, by splitting following stocks :
1.RIL -Rs 10,000 PM
2.Jio Finance Rs 10,000PM
3.Tata Motor Rs10,000PM
4. Tata Power Rs 10,000PM
5.Jyothy Labs Rs10,000PM
6.Adani Green Rs 10,000 PM
7.Savitha Oil tech Rs 5,000PM
i wish to continue as long as afford to spare extra Income, please give your view .
Ans: Evaluating Your Stock Portfolio
You have chosen a diverse set of stocks, spanning various sectors. This diversification can help balance risks and rewards.
Analysis of Selected Stocks
Reliance Industries Limited (RIL): A strong, diversified conglomerate with stable growth prospects.
Jio Finance: Benefitting from the growing financial services sector, though relatively new and more volatile.
Tata Motors: A key player in the automotive industry, with potential growth in electric vehicles.
Tata Power: Focus on renewable energy is promising, but the sector can be volatile.
Jyothy Labs: A good player in the FMCG sector, offering stability.
Adani Green: High growth potential in the renewable energy sector, but with high volatility.
Savita Oil Technologies: A niche player in the lubricants industry, offering moderate growth and stability.
Diversification and Risk
Your portfolio covers multiple sectors: energy, finance, automotive, FMCG, and industrials. This diversification can reduce sector-specific risks.
Considerations for Stock Investments
Direct stock investments require regular monitoring and a deep understanding of each company. They can offer high returns but also come with higher risk and volatility compared to mutual funds.
Advantages of Mutual Funds
Mutual funds provide professional management, diversification, and convenience. Actively managed funds can potentially outperform individual stocks due to professional expertise and continuous market analysis.
SIP in Mutual Funds vs. Stocks
Systematic Investment Plans (SIPs) in mutual funds offer regular investing with the benefits of rupee cost averaging and compounding. Mutual funds are less volatile and require less active management compared to stocks.
Alignment with Long-term Goals
Given your long-term goals and the desire to transfer shares to your daughters, mutual funds might offer more stable growth. They can be more suitable for long-term wealth creation with less active involvement required.
Recommendations
Evaluate Performance Regularly: Monitor the performance of your selected stocks regularly. Stay informed about company news and sector developments.
Consider Adding Mutual Funds: To balance the portfolio, consider adding mutual funds. This can provide diversification and professional management.
Risk Management: Assess your risk tolerance and adjust investments accordingly. Diversifying between stocks and mutual funds can provide a balanced approach.
Consult a Certified Financial Planner: For personalized advice, consult a Certified Financial Planner (CFP). They can help tailor your investment strategy to your goals and risk tolerance.
Conclusion
Your current stock portfolio is diversified and has potential for growth. However, incorporating mutual funds can offer stability and professional management, aligning well with your long-term goals.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
