You can never fault us for consistency. We educated and guided you through turbulent market times, when the inclination for most of you was to stay out of markets and be safely invested in fixed deposits. Our efforts have resulted in providing you high quality equity model portfolios that have outperformed benchmark indices handsomely and have delivered superior absolute returns.
The twelve stocks portfolio that is benchmarked to the Sensex has returned over 50% over the last one year, outperforming the benchmark by over 30%. The nineteen stocks portfolio has returned over 30% over the last one year, outperforming the BSE 500 by over 12%.
Our portfolios are fully capturing the rise of 5% in Sensex and Nifty today on the back of the overwhelming majority win for the Modi led BJP party in the 2014 general elections.
The question now in most of your lips is that whether we would be making a complete overhaul of the portfolios or we would float new portfolios that would have more value given the sharp rise in valuations of stocks in the twelve and nineteen stocks portfolios.
The answer is, our twelve and nineteen stocks portfolios have a lot of value left in them and are well on their way to outperform benchmarks and deliver absolute returns going forward. Why do we say this?
We have constructed these portfolios with a very strong theme of 2018, where we had analysed the sectors that would benefit the most from the changing economic environment. Based on our analysis we picked stocks with an investment philosophy of growth, valuation, transparency and corporate governance. Our top sectors were banking and financial services, IT and oil and gas. We had also identified strong stocks in Auto and Pharma sector for the portfolios.
Of course we do make changes to the portfolios as and when we see our price targets being achieved and we find strong stocks to replace outgoing ones. We had booked 100% profits in stocks such as Tata Motors, Bharat Forge and Gujarat Gas as we found stocks with lower valuations and potential 100% gains to replace the stocks.
We will continue to make changes to our portfolio, not on a frequent basis to show churn, but when price targets are achieved or fundamentals of a stock changes.
Hence for all of you, who are wondering whether to continue to keep investing based on our model portfolios, please do so.
The next question on your lips is can markets scale even higher given the over 10% gains seen over the last one week?
The ride for markets is not going to be easy from here on. The Modi government has a lot of work to do to get the economy back on even keel and you would have to judge their progress going forward. Global factors too will have to be constantly evaluated. However if the government takes the right decisions and global economy steadies itself, markets should scale new peaks.
Your strategy on equities should be to construct strong portfolios that can ride out rough economic weather in the near term and deliver superior performance over the next four years.