How to run your investment portfolio | Value Research When it comes to your investment portfolio, here's how to bridge the gap between theory and practice
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How to run your investment portfolio

When it comes to your investment portfolio, here's how to bridge the gap between theory and practice

How to run your investment portfolio

For a lot of investors, the step after learning - the actual doing - ends up being the problem. If you start reading books and articles about successful entrepreneurs starting and growing a business, you often come across phrases like 'execution is everything', or 'execution trumps everything.' What these sayings mean is simple: ideas are worth nothing unless implemented well.

As an investor, you must be generally aware of the business environment - businesses that start, those that succeed and those that fail. Think back over the last few years and make a mental list of businesses that have failed in the same line of activity while others have succeeded. I don't mean just the 'internet start-up' kind of businesses but all businesses. Look at the mutual fund industry. There are a handful of fund companies that have succeeded while most just struggle on and many get sold off. Look at the airline business. Look at foreign companies that have come to India to get into the cars business. Look at e-commerce. Look at stock brokerages. It's the same story everywhere. In fact, if you look around in your neighbourhood, you will surely find many examples amongst small shops and restaurants.

On the one hand, we have these examples of some businesses failing at the exact same activity that others succeed. On the other hand, we have this huge culture of worshipping 'The Big Idea'. There are people who will not tell you what their new business will do without signing a non-disclosure agreement. Why? Because they feel that the idea is everything. Anyone who has that idea can succeed and compete with them.

What vs how in investing
Sadly, the investment world is also something like this. We tend to feel that what matters more is 'what' you are going to do, and not 'how' you are going to do it. In my experience, the truth is very different. There are no good ideas that are secret. The basics of investing success - diversification, asset allocation, cost averaging, focusing on fundamentals, etc., - are available to everyone. Moreover, they are also available easily and at either zero or very low cost. There are no barriers to ideas. You can have all the good ideas in investing, delivered to the device in your pocket, at any moment that you choose.

And yet, just like in business, and just like in many other aspects of life, it's the execution that matters. Some investors seem to pick up the great ideas and just run with them and succeed but many do not. However, the problem is actually a little bit deeper than business. Unlike business, this is not about competence, but rather what the main activity of your life is. After all, investing is not the main business of your life. You cannot spend all your time learning the nitty-gritty of the actual implementation of the best ideas. Unlike business, you cannot even hire someone experienced to manage things for you...or can you?

It turns out that you can, and that is what you are doing here with Value Research.

Look at several of our articles about asset allocation, rebalancing and using debt funds in the most beneficial way. These are good ideas in investing. In fact, they are indispensable ideas and must form the core of any investing strategy. The rest of the process needs a more guided process.

And how are we going to do that? That's where Value Research Premium comes in.
This is a process that has four parts to it:

  • Provide a way for you to articulate your goals clearly.
  • Suggest a set of investments and a pattern of investments for those goals.
  • Verify that your existing investments fit the goals, and suggest changes if they do not.
  • Continuously monitor your investments to make sure they are heading for your goals; suggest changes, if any are required.

All these can be implemented by features that we have integrated into Premium which is on the website. Here's an overview of those which directly work towards meeting your financial goals.

Portfolio Planner: These are custom portfolios that are suggested to you as part of your Premium membership. The algorithm that we have evolved takes into account your goals, your income, your saving capacity and a number of other factors.

Analyst's Choice: Often, investors want to choose their own funds for some particular investment purpose. There are over 1,400 available to you and even with the help of our rating system, it's a lot of work to zoom in to the right set. However, that won't be a problem for you because as a Premium member, you will have access to Analyst's Choice. Instead of the 37 official types of funds, we have created eight investor-oriented categories which match precisely with actual financial goals that you have. In each of these, my team of analysts and I have carefully selected a handful of funds that will serve you with the best outcomes.

Portfolio Analysis: Only a few members are starting their investing from scratch. For most of you, a big question is whether your existing investments fit into your goals? This is often a hard question to answer because there are a lot of implications of switching old investments, not the least of which is taxation. In the Premium system, you can get an evaluation and a suggested fix-list, based on our expert teams' inputs.

A lot more
Of course, those are just headline features. There are a lot more that will help you keep track of your investments, returns, diversification, taxation and practically everything else that will help you achieve your financial goals. Take a look at Value Research Premium for the full details.

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