In every portfolio that I review I see 2 things – say 5 shares give dramatically high returns and the others give decent, bad and terrible returns. So over a 30 year neglected portfolio with an IRR of 20%, it is because of a few in the 30+ range and a few in the 5-6% range.

A few years give dramatically good returns and other years are bad.

These are the characteristics of EQUITY. This will not change at all.

Doing a sip for 5 years, investing in 5 fund houses’ flagship schemes will not help if you are not willing to sit tight doing a sip and having a 20 year view. If you can’t do this, basically, you are in trouble.

You can mitigate some of this trouble by investing in a sip on a regular basis while having a long view in mind.

If you cannot do that, having an IFA with good knowledge of Equity surely helps.

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  1. Hi Subra was wondering which is a better strategy …building a dividend based direct equity portfolio OR a SWP based mutual fund withdrawal portfolio for retirement funding? Don’t you think the MF portfolio with SWP will be more tax efficient? Also assuming both the options are tax neutral what are the decision points to choose one over the other?

    One more question….what purpose does a demat account serve if one is only investing in MF s? One can deal directly with the fund house right? Also are demat service providers like Motilal Oswal etc trustworthy….in light of the Anugrah issue? Can a demat service provider sell the mutual fund units without explicit customer consent?

  2. @SOURAV GANGULY

    for MF investment, demat is not required (MF investment via demat is optional). Just open the a/c with MF Utility for paper based online mutual fund investment. Since MF Utility is run by AMFI, the trust factor is very high.

    If you are investing in stocks/etf then Demat is mandatory. if you are worried about fraud, then go for bank based demat accounts like SBI, ICICI, HDFC, etc. Demat from discount broker Zerodha is also fine.

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