Most brokerages and research houses have recommended high exposure to equities to young risk-taking investors in the new Samvat year ahead, as they see most alpha generation in that asset class.
Some allocations to bank fixed deposits/debt and gold are also being advised.Asset allocation is important, as it can insure a portfolio against volatility in any single asset class.
For a young risk-taking investor, the equity allocation can be 75-80 per cent of the portfolio, carefully distributed among largecap, midcap and smallcap stocks.
Fixed income allocation can be 15-20 per cent, to provide some stability, whereas around 5 per cent of investment should be in gold, said Ajit Mishra, Vice-President, Research, Religare Broking.It is generally considered that equities outperform other asset classes in the long run.
As per a recent study, in a 15-year tenure, equities delivered 9-12 per cent inflation-adjusted returns on investment, compared with 1-2 per cent for debt funds and 5 per cent on gold.
Real estate delivered a -2.49 per cent inflation-adjusted return on investment in top seven Indian cities.50 stock picks from top brokerages for Samvat 2076Samvat 207523 Oct, 2019Samvat 2075 comes to an end, and a new Samvat kicks off on Diwali this Sunday, October 27.
In the Samvat year gone by, Nifty generated 10.8% return and Sensex 9.8%, but that growth was limited to a handful of stocks.
This is why most investors equity portfolio bled to make Samvat 2075 a forgettable year.
Samvat 2075 was tough for investors, as stock performance remained concentrated in specific pockets.Interesting Samvat Year Ahead23 Oct, 2019Since we have already gone through a significant downturn, midcaps have corrected 35-50 per cent and the way interest rates have moved, the next Samvat will be interesting in terms of money-making ideas, said Abhimanyu Sofat, Head of Research, IIFL.
Like every year, top brokerages have named their top stock ideas for Muhurat trading this Diwali.
ICICI Bank | Current Price Rs 455 | Target Price Rs 505 23 Oct, 2019Several brokerages have had ICICI Bank among their top picks for Samvat 2076.
Axis Securities has a price target of Rs 492, as it expects the bank to remain adequately capitalised for growth despite various challenges.
IIFL Securities expects it to reach Rs 505 in next 12 months, driven by growth in its retail portfolio.
Motilal Oswal and Sharekhan have also recommended the stock to investors.L-T | Current Price Rs 1,430 | Target Price Rs 1,87523 Oct, 2019IIFL Securities has a price target at Rs 1,875 on the stock, as it finds the company well placed to leverage the uptick in the investment cycle.
Karvy Stock Broking, Kotak Securities and Motilal Oswal are also bullish on the stock, and have included it among their stock picks for next one year.
SBI Life | Current Price Rs 984 | Target Price Rs 96523 Oct, 2019HDFC Securities has a buy recommendation on this stock and advises add on dips for a target price of Rs 965.
Given the untapped distribution reach, tailwinds from financialisation of savings, improving protection share, lowest operating cost ratios and improving margins, the stock looks favourably poised.
Axis Securities also has a buy recommendation on it and expects the scrip to hit Rs 936 mark by next Diwali.
However, just because equities outperform other does not mean investing in other classes is not important.
Gold offers decent returns.
I dont think gold should be avoided entirely.
It may be 10 per cent or 20 per cent, but gold should be there, said Amit Jeswani, Founder and CIO of Stallion Asset.For those already invested, next one year will be the time tweak the portfolio a bit.
Over the next 12 months, asset allocation to both equities and fixed income instruments should be increased, while that for gold should be reduced, said Gautam Shroff, Co-Head of Institutional Equities at Edelweiss Securities.
Some analysts are relatively conservative in their exposure to equities.
Dharmesh Kant, Head of Retail Research at IndiaNivesh, thinks equities should form half of the investment, while 40 per cent of the portfolio should in fixed income and 10 per cent in gold.
Sandeep Raina, Senior Vice-President at Edelweiss Professional investor Research, had the most diversified asset allocation formula among all analysts ETMarkets.com spoke to.He believes 20-25 per cent exposure should be in equities, and similar proportion in high yield instruments, while 10-15 per cent should be in gold and the rest in a combination of fixed income assets and real estate.
He said investors should keep tweaking asset allocation plans as per the market cycle.4 ways to manage your Diwali bonusManaging windfall25 Oct, 2019Just received a Diwali bonanza? Good news.
Rahul Jain, Head, Personal Wealth Advisory, Edelweiss guides you on how to make the best use of your additional cash flow.
Smart ways to use your Diwali bonus Topping up your SIPs25 Oct, 2019One of the best way to safeguard yourself from stock market volatility is by shifting the focus towards mutual funds (MFs).
Not only will investment in MFs protect you against volatility, but a periodic increase in the amount of the investments serves you well in the long-run.
Unless you have outstanding payments or debts that you need to clear, putting your Diwali bonus into lucrative investment avenues is always the best decision and indicative of smart financial planning.
Settle impending dues25 Oct, 2019The festive season will serve as a good time to clear any impending debts you have in your kitty.
Start by clearing off your credit card bills, personal loans and prepay any part of home loan.
Prepaying a big-ticket loan can help you cut down on the tenure of the loan.
Tax saving25 Oct, 2019It will be only a month or so when most employees will have to provide proof of tax savings to their employer.
And last-minute decisions for investments lead to a dip in savings that you have earmarked for other goals.
If you are not able to do so then, tax cut from your salary in these months could disturb your monthly household expenses.
A Diwali bonus can also be used for making tax saving investment, to ensure you receive a better post tax income in coming months and keep your finances in manageable limits.
Fill your investment loopholes25 Oct, 2019We generally tend to put our long-term investment goals on the back burner until there is a considerable rise in salary or existing liabilities have been met.
These can include long-term goals such as retirement, kids' education, investing in an asset among others.
When we receive a Diwali bonus, it is always recommended to create discipline and put some part of it to your long-term goals.These lumpsum contributions can help to accelerate the achievement of the goals or meet any shortfalls.
Remember, even though the initial savings amount may be small, over the longer term it can go a long way to bridge the loop-holes between the required amount and accumulated amount.