Subscribers' Hangout - July edition

Dhirendra Kumar: Welcome to Subscribers' Hangout. Every now and then, we take up your important questions, and I will try and answer with my team. So I get cracking with your questions. First question, and I don't know if it's the most important question, but it is for the most important tool for Value Research Premium subscribers. And I would like Ashutosh to answer this because he has been part of devising it and incorporating all the subjective things in the Portfolio Planner. So, how to use the Portfolio Planner? Ashutosh Gupta: Sure, so I'll provide a broad perspective of the Premium service and where does a Portfolio Planner fit into the mix and then move on to answering this specific question. So in Premium, we provide you our recommended funds through our Analysts' Choice list, which is a highly curated list of fund recommendations divided across five to seven very investor-centric categories. And the idea is that depending upon your investing need, you can pick two-three funds from this list and build your portfolio for your objective. But even if that is hard work to you, then you can simply come to Portfolio Planner, which will give you a ready-to-go portfolio depending upon the input that you provide. So the idea is that the algorithms of Portfolio Planner pick the funds from the Analysts' Choice list itself, what it deems to be the most suitable set of funds for you, depending upon the input that you provide to this tool. Now, the idea behind Portfolio Planner is that it is a culmination of all the investment principles that we've been advocating over the last two-and-a-half decades. And Portfolio Planner is able to very seamlessly embed all those principles into your portfolio. And I'll just talk a little bit about some of them. So the foremost is your appropriate asset allocation. What is the right asset allocation for you, and the investment duration has a big role to play over there. Then it is about diversification, diversification across funds across fund houses, across investment styles, all of that is taken care of by the Portfolio Planner. Then about the number of funds itself, because we've been very vocal advocates of not going overboard with the number of funds that you have in your portfolio. So, for instance, if you are new or a small investor, perhaps even a single fund is good enough for you. And that's what Portfolio Planner would provide to you. But as your scale of investment increases, so can the number of funds. So diversification is also a function of the scale of your investment. Then there are other variables like spreading your equity investment, and we highly advocate that you should not invest your equity lump sum amount at one go. And that is what the Portfolio Planner is able to deal with very efficiently. And the number of months over which it recommends you to spread your money is again a function of a lot of variables: your overall investment horizon in the first place, the scale of your monthly SIP if you have any, the scale of your earnings, and so on and so forth. So, you know, there are a lot of things going under the hood when the Portfolio Planner churns out a set of curated investments or a ready-to-go portfolio for your investing needs. Now, how to make the most of it? Well, it doesn't get simpler than that. You only come to Portfolio Planner, answer a set of highly objective questions that it asks you and get a portfolio which you can go and implement. But the real value you would derive is when you actually go and implement what Portfolio Planner suggests and then stick to it with discipline through the ups and downs of the market. And that is when you will be able to derive real value from it. And then the other nuances that what Portfolio Planner recommends to you is highly implementable and highly practical. For instance, it takes into account the investment restrictions there are on different funds. So if there is a fund which does not accept investments beyond a certain threshold amount, and if your scale of investment is beyond that, then Portfolio Planner would be mindful of that, and it will not recommend such funds to you. So all these things get embedded into the advice that you get. And this is just a start. You can expect much more from the Portfolio Planner because of the kinds of things that we are working on. We are hopeful to be able to significantly augment the capabilities of Portfolio Planner and what it can do for you in times to come. Dhirendra Kumar: That reminds me, three years ago, we were planning the Premium service, and the starting point of the Portfolio Planner was that we were working on a couple of model portfolios: aggressive portfol

This article was originally published on July 13, 2023.