We had first recommended the Twelve Stock Portfolio on 6th December 2012. The portfolio as of 9th June 2014 has given returns of 76% and has outperformed the Benchmark by a wide margin of 45.72%. The one year return of the portfolio stands at 75% and the outperformance is 45%. The portfolio is benchmarked to BSE Sensex.
The portfolio consist of value and growth stocks with high weights given to good management and sound corporate governance.
How to follow the portfolio
The Twelve Stocks Portfolio will always have 12 stocks, not more and not less. At all points of time, the portfolio can be replicated by our paid subscribers and they will more or less capture the returns on the portfolio over a period of time.
The key aspect of the portfolio is the weight given to each stock in the portfolio. For example if a stock has 8% weight in the portfolio, subscribers will have to buy 8% of the stock in their own portfolio if they are replicating the Twelve Stock Portfolio.
The portfolio is published weekly for subscribers. Stock weights do not change frequently unless valuations undergo a sharp change. When price targets are reached we either put out a fresh price target or replace the stock.
New Subscribers and Existing Subscribers
The portfolio is published every week and new subscribers can replicate the portfolio. Existing subscribers would need to rebalance the portfolio to make changes in the stocks weights that are prominent due to price changes. In times of high price changes, like in the past two months, rebalancing would need to be done at least once a month. Else it can be done once a quarter.
Every week after Friday closing we update the portfolio and if there are any extraordinary movement in the prices of the stocks, which significantly changes the weights, then we will rebalance the portfolio. After rebalancing we will publish the Current Recommended Portfolio.
The current recommended portfolio is for the new subscribers to invest in and also for existing subscribers to readjust the weights.
The readjustment in weights is basically to reduce the weights of stocks whose weights have significantly gone up due to upward price movement and increase weights in stocks whose weights have come off due to downward movement in prices. Weights are readjusted to recommended weights.
We also recommend to sell existing stocks from the portfolio and invest in new stocks that we find appropriate for the portfolio. The selling of the stocks is recommended when we see very limited potential for a stock to participate in the growth of the portfolio value.