Tuesday, April 28, 2015

Asset allocation key to maximizing returns, say experts

The difference between our parents' generation and ours has always been huge and on all parameters. This contrast has never been as stark as it is in today's corporate world, where the rules of the games have changed, the dynamics have entirely changed and so have the ways in which we deal with them.

Today, we are to meet a bunch of young single, smart and successful career women from the social networking website Ditto and we are going to find out how they manage to juggle all of this and still manage their money.

Raheja and Rustagi answers their questions regarding maximising and protecting wealth.

Here is the edited transcript of the interview on CNBC-TV18.

Q: When people start investing the first thing where they get confused is whether they should be doing it on a daily basis or whether they should do it, forget about it, review it on and off, what's the best advice for someone like these ladies?

Raheja: My fervent belief is that any asset class typically requires a period of time for maturing, for it to deliver returns. Equities as a vehicle has shown that if you give it time, if you take 10 years or a longer period of 15 years, the average compounded return from equities has been around 14-15%.

If you take any large corporate in India, from Reliance to any other corporate you would name, what was it 10 years ago and what is it today? We have typically seen in our research that whatever profits grow by market cap is a reflection of stock prices. It has grown by about 1.4-1.5 times the profits of the company.

Clearly, if you are an investor and you are invested in a good company it will give you returns. However, that does not mean you do not sit and review your portfolio from time to time. Especially, if you are invested in a lot of mid and small caps which have many emerging companies and emerging managements which have not yet proven itself, you cannot stop reviewing your portfolio from time to time.

Against that, if you have proven managements who have delivered numbers over extended period of time, there is no problem in sitting with them for a longer period.

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Tags: investment, mutual fund, equities, stocks, market, Nitin Raheja, Hemant Rustagi, WiseInvest Advisors, AQF Advisors
No intent to control capital; fund-raising door open: FM
No intent to control capital; fund-raising door open: FM
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