Asset Allocation.

For an investor to get the right asset allocation is very important especially in difficult market conditions. The two aspects to look into for investors would be: Equity and Debt.

I would recommend a minimum of 30% to max of 50% Equity in your total portfolio, and the rest being debt. Higher debt for safer investors.

Equity: 
Currently the equity market is going through a tough time with dollar hitting all time high of 60+ levels and domestic growth is also not looking good. Growth dependent stocks such as Infrastructure have started to take a hit whereas we can also see that Banking stocks are also taking a high toll. Banking stocks are the key for growth and move ahead of growth in the economy.

P/E of the Nifty index is at 18.34 levels, at these levels investor participation or invested amount should be around 30% - 40%. I would recommend investors who are ready to take higher risk to even go up to 50% as the prices at which stocks are available are trading at low levels and good valuations.

Note: Pharma stocks and consumption stocks should play a major part of your portfolio. Private banking space is better than choosing public banking.

Debt:
At the current market scenario, debt is very safe bet with even interest rates falling capital appreciation would be higher. As mentioned above, domestic growth is not looking good and debt thrives under such scenarios.

Investors should invest via debt funds with a good mix of long and short term funds through the mutual fund route. Companies such as Franklin Templeton is a good choice of fund.

For investors ready to take a little more risk but are sticking to debt space, then company bonds will be a good option.  Follow the link http://www.moneycontrol.com/fixed-income/company-deposits/ .

If you need advice on which company deposit should be taken or which debt fund should be selected. Send an email with your portfolio or goal requirements, this will help me understand and choose better.

Email: devashish.dalmiya@gmail.com. Subject: Blog Query: ___.

Indian Consumption story

Apart from the growing middle class which is the major chunk of the indian consumption sector i seem to understand that in the future the government would also play a major role.

Short Term:
With more than 8 election scheduled in a year or so, there would be a rise in government spending. as empirically stated there is an average increase of 17-18% in the government spending. Therefore, more money in the hands of consumers. With PI and PDI increasing this could drive the consumption cycle.

Long term:
Government has taken many initiatives of removing the barriers for subsidies and other incentives provided by them (Aadhar Card). With such incentives i would understand it as discretionary spending can increase. Companies like HUL, ITC, Pidlite have good earning projections.
As we are also in a declining interest rate scenario, more loans will be taken again a movement of money from banks, institutions to consumers. Therefore, the consumption cycle is at its prime stage and theres money to be made.

Research on the below companies are going on:
Pidlite, HUL, ITC, Tata Global Beverages, Jubliant, Godrej, Havells, Britannia, Pantaloon, UB group.


If anyone seems to have a contrary view please comment.