How much of your Networth is in Equities?
Printed From: The Equity Desk
Category: Market Strategies
Forum Name: Words of Wisdom
Forum Discription: Have you found a golden rule to profitable investing? Share experiences, articulate your thoughts quote a book or a guru.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=3704
Printed Date: 07/May/2025 at 4:26pm
Topic: How much of your Networth is in Equities?
Posted By: basant
Subject: How much of your Networth is in Equities?
Date Posted: 19/Jan/2013 at 8:11am
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Everyone starts from a very low base and most of them end at that same number as well so this is no unique problem to have what matters is how we turn the low base into an advantage by aggressive betting and portfolio allocation. If you think that your capital is tiny and you can afford to lose it please apologize me for my saying but "you will". Its the tough to make your first five lacs, hard to take it upto ten lacs, difficult to put that to twenty five lacs and than it gets easy.
So please throw away the notion that your portfolio is small and you can afford to lose it by betting aggressively. A better strategy would be to buy long dated Nifty Calls. Pantaloon is history and I have discussed a lot so any more discussion would be a repetition.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Replies:
Posted By: shivkumar
Date Posted: 19/Jan/2013 at 11:12am
Aap ke moonh mein shakkar
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Posted By: rajnsharma
Date Posted: 19/Jan/2013 at 11:21am
PS: All of my personal wealth except the home I live in, are in equity and I have no regrets. TED(and Basantjee ofcourse) has changed my perspective and I have been able to compound at TED standard rates in last 4 years. ------------- Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett |
Posted By: prabhakarkudva
Date Posted: 19/Jan/2013 at 11:28am
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Same here.
All my net worth into equities and all because of TED and the man who is running it. Excel ji your statement might be true for moneycontrol forums but definitely not on TED :) We all mind big time losing 30% of our portfolio. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: rajnsharma
Date Posted: 19/Jan/2013 at 11:44am
This is really good. ------------- Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett |
Posted By: FutureBull
Date Posted: 19/Jan/2013 at 11:50am
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Rajji,
I think you should also help define networth. Lot of folks would be inheriting fixed assets/gold and that would skew the ratio. Despite investing all my savings in equity it is still below 20% of all my wealth. If I consider asset created by myself it would be closer to 60-70% and it is because my real estate has appreciated handsomely during last 12 months. ------------- ‘The market always does what it’s supposed to — BUT NEVER WHEN’. |
Posted By: rohit1889
Date Posted: 19/Jan/2013 at 11:50am
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Though my networth is small(Age 23 and currently a student), My savings during 2 years of my job are into equities..
I guess with a small portfolio, one should calculated bets.. like betting 30% of portfolio on stocks like Hawkins, Maruti,etc. when they face temporary problem.. (This is ideal thing to do for large portfolios as well) ------------- If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won't get bored. |
Posted By: rajnsharma
Date Posted: 19/Jan/2013 at 11:55am
------------- Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett |
Posted By: TRADER SOUL
Date Posted: 20/Jan/2013 at 12:25pm
It is right sir to start to earn profit money with tiny capital is most difficult. Before few days back I am able to jump my capital from 5000 to 1,20,000 with in trading week in Option. But in next week due to my care less nature . I loose almost 80000 in one trade.    ------------- Learn To Trade with http://jtkuwar.com |
Posted By: yoda
Date Posted: 20/Jan/2013 at 7:57am
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Hi TRADER SOUL, this thread is about long term assets (equity, real estate, gold, bonds & etc.)
And the subject you are talking may be related to http://www.wikihow.com/Get-an-Adrenaline-Rush P.S. Please take it easy. I intend no offense to you but worrying a lot about your portfolio's health. ------------- "Greatest enemy of knowledge is not ignorance, it's the illusion of knowledge" - Stephen Hawking "With our thoughts, We make our world" - Buddha |
Posted By: retailinvestor
Date Posted: 21/Jan/2013 at 12:17pm
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30% in equity in my case and the rest in property(small amounts in cash). I wasn't fortunate enough to inherit anything from my parents - house went to my lil sister. They gave me good education and my biggest asset is my earning power! Looked after financial needs of my parents and now I don't have any family liabilities.
I will go a step further - 64 L in equities and 140 L in property. Liabilities 27 L. Aim is 10 crore net worth in 13 years when I turn 50. |
Posted By: mira
Date Posted: 21/Jan/2013 at 12:19pm
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Hi Basant Sir . Now a days you have became a bit inactive . Would request you to share your experiences about individual companies where u thought of investing but somehow did not invested and if invested did manage to get out at the right time and those companies blown out . Would help us to understand what to look for in making good investments . ------------- god is great |
Posted By: basant
Date Posted: 21/Jan/2013 at 1:06pm
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Completely agree. Am trying to be active again as you would have noticed over the past week. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: smartcat
Date Posted: 21/Jan/2013 at 1:11pm
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67% in equities.
I still can't get myself to 100% levels mostly because of future predictions of Gloom Doom Kaboom guy (Marc Faber) and also the "buy commodities, buy gold" guy (Jim Rogers) |
Posted By: Kautilya
Date Posted: 21/Jan/2013 at 3:14pm
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I am not including the house I live and jewellery.
Two years back equities used to be less than 5% of my networth. Current allocation is 20% in Equities, 75% in Real Estate and 5% Cash. Over the years I intend to make equities 50% of my networth. ------------- My indecision is final. |
Posted By: pikrohit
Date Posted: 21/Jan/2013 at 3:41pm
I have around 15% in equities because I want to buy a flat for myself in Pune. The flat prices seem just too much to me. Wondering what to do...go ahead, take a big loan and buy the flat, or put the money in equities and wait for real estate price to come down. The latter might not happen 
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Posted By: itpro
Date Posted: 21/Jan/2013 at 5:35pm
Nice to read this !!. Yes.. and from last one week my visists to TED have also increased. Thanks for building such a nice platform and moreover imparting knoweldge to all new learners...
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Posted By: rohit1889
Date Posted: 21/Jan/2013 at 7:21pm
Its really good to read your posts again.. TED is not TED without your posts...
------------- If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won't get bored. |
Posted By: basant
Date Posted: 21/Jan/2013 at 7:30pm
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Thank you! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: us121
Date Posted: 21/Jan/2013 at 8:11pm
This is the Best thing that can happen to TED Forums. ------------- ABILITY will get u at d top. CHARACTER will retain u at d top |
Posted By: satish23
Date Posted: 21/Jan/2013 at 8:47pm
this should encourage other senior members also to post their views more frequently |
Posted By: omshivaya
Date Posted: 21/Jan/2013 at 11:23pm
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100% in equities. And will maintain same level for years to come :-)
------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: smarar
Date Posted: 21/Jan/2013 at 12:57pm
Here , something is missing in the overall portfolio and no one is willing to say . I might be wrong here . The comments made by me is just an opnion and open to debate. This might irate some TED salaried members . So ,please calm down and give a thought to this scenario. Depending on the "context" of the individual , this might not apply for non-salaried individuals or enterpreneurs or unemployed or full time investors or students . Rajnsharma. Prabhudeva, retailinvestor, pkrohit -: I think these individuals are working professionals . They might be young or old . Rajnsharma, based on your comment in http://www.theequitydesk.com/forum/forum_posts.asp?TID=1186&PN=27 - Gruh Finance thread , I think you are a working professional . Your overall portfolio cannot be full in equities. You do have a debt fund , that is contribued by you from your monthy salary and your employer and that is ,"employee provident fund"/"pension" and the "Gratuity" component that is paid by your emloyer(this might not be yours , but employer does . Note that gratuity component differs from company to company).Also, based on your comment in Gruh Finance thread and if you are working there till now(salary hike year on year, pf interest rates hike etc..) , you might have a good chunk in debt portfolio depending on your experience and that might change the debt to equity ratio of yours . So , there is no harm when primary skill(the salaried) goes on contributing in debt portfolio(employee provident fund /pension) and the secondary(other skill) goes on to equities and that in equities , be it 100%. He/she knows that a safe debt fund (employee provident fund/pension) is present with him/her . So , losing 100% of equity in your portfolio is not at all a problem . Also , "insurance "-be it life or term or home loan etc will also be there. Also , there might be liability like home loans , auto loans , shares pledges to take loan , loan against shares, gold etc. Same goes to Prabhudeva, retailinvestor, pkrohit and many more salaried TED colleagues. Remmeber , from the context of full time investors(both middle and young , but not old/senior citizens) like Basant(happy that he nows owns Basant corner and hope it will get bigger ) , smartcat(another full time investor ) etc. who earns full time by investing and that is in equities (some might have debt portfolio to handle fixed income ), which is their primary skill . Once I watched an interview by Rakesh J. In that interview , he mentions that even though he is a full time investor and his overall portfolio is in equities , he has no fixed income and that he pays interest(leverage) Salaried TED colleagues need to think about this in their networth. I learnt this lesson as I am salaried . ------------- Patience always helps. Do your own research when investing in stocks |
Posted By: basant
Date Posted: 21/Jan/2013 at 7:40am
I am more than fully (because of leverage) invested in equities without considering the house that I live in. I have never bought jewellery/Gold etc. This has been the case before Basant's Corner also when I did not have operating income. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Monkey
Date Posted: 21/Jan/2013 at 9:01am
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smarar,
First of all why are you turning our Prabhakar Kudva into Prabhudeva. Of course, I like dancing skills of Prabhudeva and not sure whether Prabhakar can match him in dancing, but, we will leave that to Prabhakar to clarify.
 Coming to the point, contribution of salaried individual to PF etc is automatic and compulsary. Individual has no control over it. What we are talking about here is allocation of surplus which a person is free to allocate and percentage of such allocation in equity. So, you need to look at what people say here in that perspective.
Besides, it is not always true that a salaried person contributes to PF. I am salaried person but living out of India and there are no deductions like PF etc applicable for me. My allocation is 100% equity (not considering my apartment meant for my primary housing and some FD as emergency fund).
Also, comparison with RJ in this regard is not appropriate. RJ will have his dividend income itself in multiple of his needs. For that matter, Azim Premji might have his 99% of networth in single company - Wipro. That does not mean that an individual investor should follow the same.
As for Smartcat, he is the smartest cat in the world and a Monkey like me can not simply follow him. Obviously, Basantji is Basantji. So, there are no set rules about equity allocation. Every person needs to act according to his own knowledge and limitations and, most importantly, according to his approach to volatility inherent in equity market.
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Posted By: pikrohit
Date Posted: 21/Jan/2013 at 9:19am
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Right about salaried part. Having PF, gratuity, superannuation gives a cushion in some sense. I think that should be enough.
I would love to increase my equity allocation but since I plan to buy a flat in near term, I have to be careful. Btw..I read an article in outlook 2 weeks back that Indians are putting all their money in real estate and gold. In 2011, net flow for equities was negative. Mutual funds are seeing huge withdrawals by retail investors. Makes me wonder whether I should wait for a real estate bubble burst, at least in Pune. |
Posted By: prabhakarkudva
Date Posted: 21/Jan/2013 at 9:20am
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In my portfolio of personality attributes (which is highly diversified ) dancing has no allocation. I was embarrassed to the core during my marriage recently due to this mis-allocation.
Anyway i digress. I think Smarar is technically right. Our salary incomes does give us that mental cushion which lets us be 100% into equity. Having said that assuming our portfolios fall 50% it will take us a number of years' salary to make up for it, so yes it is a big deal. Also Smarar we're a minority - almost everyone out there is salaried but how many have a 80-100% of their investible surplus into equities? So just being salaried doesnt make it easy to make that allocation. One needs the right mindset and the right stocks to be able to do that - which is what we've learnt and gained on TED over the years and encourage others to do the same - provided they can sleep well with such an allocation. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: basant
Date Posted: 21/Jan/2013 at 10:52am
While I agree on the dancing part I am sure you are not too are behind when it would come to whistling.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: prabhakarkudva
Date Posted: 21/Jan/2013 at 11:14am
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I will come back to you on that in a couple of weeks ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: S.Varghese
Date Posted: 22/Jan/2013 at 12:59pm
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I am salaried and apart from my house, I have most of my saving 80% in equities. I have a small piece of land which I thought was an investment, but for some reason it is stuck.
Other than that the do-gooder GOI comes to my workplace every month and forcibly takes away 25% of my income - "to help me save but distributes the money in various social schemes to dig pits and to garner votes" - and makes up for the shortfall by printing money and creating inflation. Anyway I cannot do much about it.
Otherwise all my active savings are in equities in a few companies. My only regret is I should have done this much earlier. ------------- Fools rush in where angels fear to tread. |
Posted By: tejas.k
Date Posted: 22/Jan/2013 at 4:08pm
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Good point. None of my colleagues know abcd about equity. Forget about equity. People are ignorant about even basic personal finance. They keep buying ULIP based products with fancy name like children plan, college plan, retirement plan and traditional insurance products.
Their only dream is to get hike and promotion in the job.
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Posted By: rajnsharma
Date Posted: 22/Jan/2013 at 4:24pm
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Smarar,
I have literally no PF(provident fund) as I pulled out everything and put in in equities in 2009 when I changed my job. Also you need to spend 5 years in a company to be eligilble for Gratuity, which I have not been doing for last 12 years
 .Hence my only savings are equities but I do not need that money for ever. Hence this confidence. My wife and my mother remain in FDs as most of other Indians do, so they can bail me out if I am in a temporary trouble. Hence the confidence.
Remember having the single source of income(salary) is the biggest risk. I realized this when I was laid off in 2008 Tsunami. At that time I decided that I will not leave myself on the mercy of employes.
Thanks to the wisdom of TED and BC, I am on my way to financial freedom(started in end 2008). The way things are going if it continues, next 5 years I will achieve my goal.
"I feel in longer run(10-15) years, if you are in decent companies the return will be much better than any othe asset class. " If you are confident about this there should not any fear of putting maximum money in equities. ------------- Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett |
Posted By: shivkumar
Date Posted: 22/Jan/2013 at 4:27pm
The earlier one learns this, the more successful s/he will be in attaining financial independence. Today jobs are contractual and entire industries go into expansion/contraction mode at the same time there by increasing the risk of unemployment. |
Posted By: rajnsharma
Date Posted: 22/Jan/2013 at 4:31pm
------------- Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett |
Posted By: tejas.k
Date Posted: 22/Jan/2013 at 4:41pm
| Not everyone is a genius like Basantji. So 100% exposure may not be the right thing to do. Though we can assume that equity (not the broader market. but high quality companies) will give a very good CAGR in the long run, it will not be linear. During a market crash, even high quality stocks wont be spared. So I believe that one should have a debt portfolio such a way that it takes care of inflation adjusted living expense for at least 10 years. This will help us stay invested even during a bear market. |
Posted By: rajnsharma
Date Posted: 22/Jan/2013 at 5:13pm
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What I have learnt in last 4-5 years is temparment is most vital for investing. Whatever knowledge one has can be useful in picking up right stocks but staying with them needs temparament especially when there are temporary troubles with the companies, which every company faces during their journey towards growth.
If one can't bear the pain of 50% notional loss(due to bear market sentiments), one should avoid high equity exposure. Equities are more perdictable only in long run (10-15 years). ------------- Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett |
Posted By: prabhakarkudva
Date Posted: 22/Jan/2013 at 5:20pm
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Its not about 100% but whether you're betting a meaningful amount for it to make a significant difference to your bank account.
If you're worth 10cr and you're investing 50 lakhs in equities it isnt worth the effort. If you invest atleast 3-5 cr then if you're right on your bets it will make a significant difference to your net worth. 70% or 80% or 100% isn't much different in spirit but 5% or 10% is very different. ------------- Take your chances and keep them in a box until a quieter time. |
Posted By: rajnsharma
Date Posted: 22/Jan/2013 at 5:45pm
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Prabhakar,
I totally agree with you. 100% is more realtive. It means significant.
One should not spend time and energy on direct equity exposure if it is just 5% or 10% of networth(statement not valid for HNI). ------------- Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett |
Posted By: bandlab1
Date Posted: 22/Jan/2013 at 8:36am
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basant-ji,
i have a query on the dividends. i want my dividend money directly go to my bank. how to do this ? i googled and found we need to fill ecs mandate and give to DP (my broker IIFL) and DP will forward this to NSDL/CSDL. the companies (not all of them) can send dividends through ecs using the dp info from nsdl/csdl
i gave ecs mandate to IIFL, but those guys are clueless (as always). can you throw some light on this ?
i dont want to miss the checks in the mail and avoid a visit to bank
thanks a lot
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Posted By: basant
Date Posted: 22/Jan/2013 at 9:03am
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that is the only process; try talking to the DP dept. of IIFL. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |