CHAPTER 1: AN INTRODUCTION TO FOCUSED INVESTING

As the name suggests, focused investing otherwise known as concentrated investing lets the investor focus on a handful of companies rather than investing in dozens of companies. In this strategy, the investors put the maximum of his corpus in the top 8-10 opportunities which have been well-researched.
 

In the stock market, we have a variety of investors, some are employees who save on monthly basis, some professionals who depend upon their commissions for investments, some businessmen who invest their profits and then there are some who are professional investors.
 

Except for the professional investors, the majority of investors as mentioned above have a mainstream line of the profession which keeps them occupied and the reason they invest in the stock market is to grow their savings. But since the majority of their time is occupied by their work, they have very little time to do their own research behind their investments and hence it is absolutely difficult for them to maintain, track and efficiently manage their huge portfolios with 20-30-40 stocks otherwise known as diversification investing.
 

This is where this strategy of focused investing or concentrated investing comes in to save the day by offering superior returns and the ease of tracking the portfolio with as less as 8 to 10 stocks in them with proper fund allocations.

 

 

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HOW TO CHOOSE THE BEST INVESTMENT ADVISOR?

In the world full of fake investment advisors, it becomes difficult to find the right investment expert, who can guide us about the right investment portfolio. Though finding such an expert is a difficult task, but not impossible. Here in this article, we have enlisted the pointers on what to look for an investment expert before hiring their services.

 

#1 EXTENSIVE RESEARCH ON YOUR DEDICATED INVESTMENT ADVISOR

Before hiring an investment advisor, it is important to research about his capabilities by asking him following questions.

  • Can you review my investment portfolio and suggest me the stocks that are worthwhile to invest according to my risk appetite?
  • Can you suggest some countermeasure for the investment plans that have not be carried of the way I wanted?
  • Can you suggest me the ways on how I can restrict the risk?
  • Will my investment portfolio be able to defy the prevailing market sentiments?
  • Can you assess my risk profile and offer me suggestions according to that? Remember Risk and reward is the fundamental factor that determines the investment product, so without accessing the risk profile in detail, it is impossible to select the right investment products that match with your goals.

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WHY IS STOCK MARKET THE BEST INVESTMENT TOOL?

The people like to stay away from the stock market because they think that it is a risky investment option. But the real reason behind it is our attitude, greed & fear, financial illiteracy, and the decisions that we make are influenced by the emotions. Hence, it leads us to the loss-making traps. However, it is a wrong belief.

Building the portfolio according to the risk appetite and thinking before investing is the key ways to earn returns from the stock market, even if you are a beginner. Here, in this article, we help you to evaluate the reasons why the stock market is the best investment tool.

 

#1 HELPS YOU FETCH HIGH RETURNS

Investing in equity through the mutual funds or directly through the shares can help you to leverage the power of compounding. Though the equity investments are volatile in nature it is best suited for achieving the long-term objectives. Equity asset class offers the best inflation-adjusted returns over a long period of time. Here’s a chart showing the kind of returns offered by Bank FD, Debt Mutual Fund, and Equity Mutual Fund.

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INDIA CAN GROW EVEN WITHOUT MODI: RAAMDEO AGARWAL

India’s stocks are falling. Investors are worried about upcoming elections. But Raamdeo Agrawal has a message for them: forget about all that noise.

It’s the economy, stupid, says Agrawal, who built Motilal Oswal Financial Services Ltd. into a $2.3 billion firm. In the veteran stock picker’s view, it doesn’t even matter who becomes the country’s next leader, because the economy will grow anyway. And that means, quite simply, that India’s equities are a buy.

“Whatever you do to the economy, growth doesn’t dip below 5.5 to 6 percent,” Agrawal said in an interview in Mumbai. “A recession in this country means 5.5 to 6 percent growth.”

India’s benchmark equity gauge has slid 6 percent from a record in January as the global selloff hit sentiment already weakened by the government’s move to tax stocks gains. Adding to the concern are cracks in the popularity of Prime Minister Narendra Modi’s Bharatiya Janata Party before state polls starting in May. The fear for some is that Modi may not win a second term in 2019. Continue Reading

WHAT ARE THE BENEFITS OF LONG TERM INVESTING?

Though the tremors of demonetization and implementation of GST can be felt till now across various sectors like hospitality, jewelry, etc. but it is believed that the long-term investment is the style of investing which can safeguard you against such volatilities. It can offer you return at a much higher rate, can beat the heat against the inflation and cover you when the market is extremely volatile. Here, in this article, we have listed the reasons why an investor should invest in the long term.

Change in the market expectations-The experts is of opinion that the investors should lower their expectations as it is unlikely that market will continue to grow in the same manner as it did in the year 2017. So, the investors need to be extremely cautious while picking up the stocks and should go ahead with investing in sound companies with an outstanding management.

Intraday trading is risky– intraday trading requires a lot of knowledge and mindfulness on how the market operates. This type of trading should not be done by the people whose sole aim is to generate money. Patience is the pre-requisite in the stock market. Here, we have tabulated the difference between intraday trading and investing in the stock market.

 


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PENNY STOCK PORTFOLIO V2.0: Aksh Optifibre is delivering 210% in 1.5 years

 

Aksh Optifibre was one of our stock pick from our Penny Stock Portfolio Version 2.0 which was released in June 2016. The stock was recommended at a price of Rs. 15 and it has recently touched a high of Rs. 46.50, up by 210% in a matter of our 1.5 years. Here is the stock performance –

 

RECO DATE: 20th JUN’16  RECO PRICE: Rs. 15  PEAK PRICE ON 8th JAN’18: Rs. 46.5

 

When we recommended the stock as one of the 10 stock picks from Penny Stock Portfolio V2.0, we had issued a Research Report. The report consisted of few reasons why we projected the company delivering such growth going forward. We would like to share the details of the report with you –

Excerpts from our Research Report issued on 20th June 2016

 

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PENNY STOCK PORTFOLIO V2.0: Vikas Ecotech is delivering 275% in 1.5 years

 

Vikas EcoTech was one of our stock pick from our Penny Stock Portfolio Version 2.0 which was released in June 2016. The stock was recommended at a price of Rs. 13 and it has recently touched a high of Rs. 48.50, up by 275% in a matter of our 1.5 years. Here is the stock performance –

 

RECO DATE: 20th JUN’16  RECO PRICE: Rs. 13  PEAK PRICE ON 4th JAN’18: Rs. 48.5

 

When we recommended the stock as one of the 10 stock picks from Penny Stock Portfolio V2.0, we had issued a Research Report. The report consisted of few reasons why we projected the company delivering such growth going forward. We would like to share the details of the report with you –

Excerpts from our Research Report issued on 20th June 2016

 

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WHY MAINTAIN A FOCUSED EQUITY PORTFOLIO?

While building your portfolio whether you are a newbie or a seasoned investor, you need to remember; too many stocks spoil the performance of the portfolio. This is a proven fact with many successful examples and the concept of maintaining a focused portfolio is endorsed by all the mega-successful equity investors in India as well as abroad.

If you are an equity investor on the path of generating Alpha-returns in your own portfolio, in quest of knowing everything about everything you end up knowing very little about everything, which actually does more harm than help you. You don’t need top 50 or 100 stocks to make money; only 10 to 15 great quality stocks will do the trick.

We had designed a customized portfolio service called Penny Stock Portfolio in which we had focused only on top 10 high-quality Penny stocks. The portfolio was well balanced in terms of sector allocation and stock specific allocation and it has proven to be a huge success for our subscribers. Our Penny Stock Portfolio delivered 86% average returns from October 2016 till date compared to BSE Small-Cap Index returns of 38% in the same period. The same is displayed below in the graph –

 

 

Here are our top 5 reasons why a focused portfolio is the only way to creating wealth in the long-term –

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WHERE DO YOU MAKE MAXIMUM PROFITS – SHORT TERM, MID TERM OR LONG TERM?

We at Excel Stock Research have been providing stock market advisory services for nearly half a decade now and we can confidently say that we have catered to almost every type of investor there is in the Indian market for example investors who are happy at least they did not lose any money if not make some or investors who feel even 50% annual returns are not sufficient.

No matter what expectations the investors have, there has been one particular question that we are asked time and again – Where do I make the maximum profits, holding the stocks for Short Term, Mid Term or Long Term?

Hence, in this edition of our Pathshaala article, we thought of breaking the ice and answering the question straight on.

Just a heads up before we dive into the specifics, we do not consider intraday or BTST (Buy Today Sell Tomorrow) as a healthy source of creating wealth, hence, we will not even talk about these two methods under this article.

 

WHAT IS SHORT TERM INVESTMENT?

According to us, a Short Term investment is where an investor buys and sells within 3-4 months during which he can make anywhere from 10% to 30% and under few cases even more than 30%!

This is the segment where the major action is!

The Short Term investments are mostly based on technical charts and taking advantage of stock specific corrections. Let’s take one of our live examples, Dewan Housing Finance hit 52-week on 20th July 2017 at Rs. 479 and due to profit-booking, it got corrected by 10% in a week itself. Since the stock was expected to deliver great Q2 numbers and the market sentiment was positive, we recommended the stock to our Short-Term subscribers at Rs. 435 on 9th August 2017. Within 1 month, on 7th September the stock touched a high of Rs. 560 and we booked 29% profits – This is a perfect example of a successful Short Term investment.

DEWAN HOUSING FINANCE LTD.

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3 HABITS STOPPING YOU FROM BECOMING RICH

People don’t become wealthy by accident. You have to be determined to do the right things to create wealth. Since it starts with mindsets, we suggest that you get rid of these three common, yet costly, habits.

 

HABIT #1 PROCRASTINATION

“I can’t afford to invest right now. I’ll do it next year when I get my bonus.” Sounds familiar?

Procrastination is a bad habit in itself but can be disastrous when it comes to investing. Don’t delay your savings plan. The longer you wait, the more it works against you. You must have heard about the “Compounding effect”. The ace investor, Warren Buffett has a very interesting thing to say about it – “Compounding is the 8th wonder of the world”.

Let us give you a very simple example to explain why compounding effect is touted to be the 8th Wonder of this world.

 

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