Here is a model portfolio for investors who may wish to start now.
Stocks, Sectors, Close on Oct 13, 2008
Infosys - IT , 1310
State Bank - Banking, 1526
MTNL - Communications, 68
NTPC - Power Generation, 180
GMDC - Natural Resources , 102
ONGC - Oil Exploration, 912
Invest equal amounts to each stock. Thus, if you are investing Rs 60,000/- , allocate Rs 10,000/- for each.
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No doubt the PSUs are trading at cheap valuations but they are traditionally less effecient, less creative and bureacratic as compared private sector counterparts. The failure of the private banks is attributed to the failure of the regulatory mechanism of the govts. The very nature of the human is to take risks and be greedy, so there is nothing wrong with huge bets and high salaries.
I would stick with SBI, INFY and rather sell stocks like MTNL and SAIL at every rise.
Give rationale for investing in these and at those prices. I don't think SBI at Rs.1526 is a buy. Need to come down to Rs1350 where it was last week. And why MTNL? What long term growth prospects it has? I would rather bet on RCom rather than MTNL at current prices. Another odd one out is GMDC. Why invest in the sector which is goinig to remain in downtrend until the fears of recession subsides. I wouldn't buy any commodity related stock at least for the next 2 quarters. I would agree on other choices though one should stagger the investment rather than investing entire Rs60,000 at one go.
And how does one protect one's portfolio?
Mr Sudarshan,
I am a vivid follower of your analysis, could your please clarify on the time of investment for the above protfolio and what should one do if say the shares go up/down by 20% or is it buy and forget?
Thanks