Saturday, December 01, 2007

Back to Blogging & a New Investment Plan in Action

It's been more than 3 months since I last blogged. During this hiatus, I made a whole host of new investments and am currently working on a few more ideas. Will share each of these over the next few weeks. Have altered my approach towards money management too. The focus now will be to keep a well-balanced portfolio, that includes both growth investments and value stocks. The ratio I am comfortable with is around 60:40, in favour of growth stocks.

Growth stocks - Stocks that are currently under-researched or are still evolving but offer great promise in the long run. The two key factors here are - scalability of business (growth potential) and the management (growth engine).

Value Stocks - These are mis-priced stocks available at significant discount to their 'current' fair value. The key factors to look here are - P/E, P/B, [ lower the better] and Return ratios (RONW or ROCE) [higher the better]. Some of the investments in this category may include stocks that are currently undergoing some kind of a restructuring, which is likely to yield results at a later date.

The ratio 60:40, in favour of growth stocks, will primarily work in this way - profits out of value investments will be pumped into growth stocks, given that most of the growth investments take time to mature.

Further, instead of investing in lumps, I've started investing in a more systematic manner. The rule is 10% of my monthly basic salary is put into stocks.

I hope my new and fine-tuned (or so I think) investment plan works fine, it has done so far in the past few months, but then 3-4 months is too short a period to gauge any performance.

So here we go...

1 comment:

Imran said...

Hey Ravi,

Great to hear that you are at your blogging best again ... looking forward to some quality posts going forward .. cheers !!