How to we construct your investment portfolio?

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This presentation will probe you into many aspects to be considered for successfully constructing your portfolio.

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How to we construct your investment portfolio?

  1. 1. PORTFOLIO MODELING CLIENT RISK RETURN ASSESSMENT
  2. 2. STARTS WITH ….. PORTFOLIO MODELING
  3. 3. PRELIMINARY UNDERSTANDING o Demography Assessment o Age & Qualification o Health profile / Hereditary risks o Insurance policies for self and dependents o Dependent details – associated capital expenditure [weddings / education / etc.] and likely period of capital expenditure o Existing debts [if any] o Average monthly commitments & duration o Existing work details o How secured is your work / business [against competition]? o Is the income sufficient to meet routine life style commitments? PORTFOLIO MODELING
  4. 4. PRELIMINARY UNDERSTANDING o Detailed understanding of existing business o Fluctuations in revenues o Level of competition o Scope of growth o Capital inflow requirement for next 2 to 3 years o Likelihood of savings to be generated o Existing Investment details o Debts, equities, FD, bullion, annual insurance commitments o Existing Asset details o Residence, office, rental yielding properties, others PORTFOLIO MODELING
  5. 5. TIME TO ANALYSE … PORTFOLIO MODELING
  6. 6. DECISION MAKING o Size of Portfolio account o Plus, planned additional commitment quarter on quarter o Type of Portfolio account o Discretionary – PMS manager will take decisions on your behalf o Non – Discretionary – PMS manager will offer suggestions but you will decide o Allocation amongst asset classes o Debt & money market, Equity & equity related, others o Investment horizon. Can be different for different entities / asset classes PORTFOLIO MODELING
  7. 7. DECISION MAKING o Allocations in equity instruments o Market capitalization – Low, Medium & High o Risk aspects – Low, Medium, High o Exposure limits – Entity, Industry, Business house o Defining allocations on basis of your risk appetite o Industry risks – Competition, cyclical & regulatory o Performance risks – Sales growth, profit growth, RONW, OPM o Management risks – Transparency, holding, promoter pledging's o Leverage risks - Debt – Equity, Interest coverage o Valuations – PE multiple, beta, past consistency in performances PORTFOLIO MODELING
  8. 8. PORTFOLIO MODELLING o Initial Tasks o Creation of customized universe of stocks and debt instruments for you. Investments will never be done outside your universe and within maximum or minimum parameters laid. o Follow – up Tasks o on continuous basis – monitor market and stocks within universe. Take decisions to buy, hold or sell. o quarterly – review your universe and add or remove entities accordingly. Furnish your performance and outlook report. PORTFOLIO MODELING
  9. 9. TIME TO ROLL OUT … PORTFOLIO MODELING
  10. 10. THANK YOU Investment is subject to market risks. Please read disclaimer information on WWW.MUNOTHFINANCIAL.COM

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