WobblyMarshmallow

Doubling down on Equities?

Hi guys, I have around 4L cash lying around which I wanted to invest. Currently, I think I am in a position to take maximum risks, and see where things go. I also haven’t redeemed the 1.5L tax deduction on Section 80c so PPF and ELSS are open as an investment opportunity.

I was worried to invest in the current equity markets. Have just put in around 6.5L into Equities in December (Split equally amongst Large, Mid, Small and Flexi Cap)

Needed advice on which seems a better option:

Put 1.5L in PPF and the rest in Large Cap MFs since Large Caps haven’t peaked yet
Distribute the 4L over the next year (~33k/month) and invest it in a SIP to account for market changes
Put the entire amount into equities (1.5L ELSS, 2.5L Large Caps)

Also, needed advice if it’s better to look for a Real Estate or SGBs Investment to diversify risk? (<25 yo right now so can take a property around 40-50L to test the waters)

What are your views on the current market? I’m planning to continue investing a significant chunk (~50% salary) into SIPs all through. Should I reconsider?

11mo ago

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SparklyRaccoon

Stealth11mo

Just wait for the dip to come. Risk reward is through to the roof right now. If you still want to invest, do it through the SIP route into stocks. Spread out your money into 16 weeks and deploy it every friday.

WobblyMarshmallow

Stealth11mo

Thanks! Can you explain the line about Risk Reward being through the roof?

SparklyRaccoon

Stealth11mo

Anything you buy in the market you got to have odds on your money. Lets suppose you buy a stock and you risk 1000 rs on any stock(1000 rs = Entry price - stop loss) if the entry price of stock is 100 rs and SL is 90 rs you should buy 100 stock that is if stock were to hit SL max you would lose is 1000rs .i.e 100×10.

That's how you should be creating a portfolio every stock should get equal risk. Depending upon the market condition generally i target minimum 1:3 Risk reward( RR). I dont sell when i reach 1:3 RR thats minimum i target. At times you can easily get 1:5, 1:10, 1:25.

Currently the market is in a very mature trend. 80 90% of the move is over. Anything you would buy right now SL are going to be deep like more than 7,10,12%. So what are the odds that things are going to move double of the SL %. Best R:R currently you can get from the market is 1:1. So wait for the market to fall or consolidate. Even if the consolidation is sideways or we get a good fall of 5,7% on the index level, then bring the fresh money when the new cycle starts.

R:R IS THE MOST CRUCIAL WHEN YOU BUY ANYTHING. The day you will get the hang of it you will save yourself from blunder. If you still wanna buy do it through the SIP route. Buy small small quantities on daily/weekly basis this way you can benefit from volatility.

JumpyUnicorn

Wipro11mo

Invest when correction happens in market , at present it's on higher side.

WobblyMarshmallow

Stealth11mo

Fair but aren’t we heading towards the bullish side till the elections, how do you time this correction? When are you anticipating it?

DerpyLlama

Flipkart11mo

I too have this same question

PerkyPotato

Uber11mo

I would've SIP'd it over the next 4 months.

Max out on Tax Free money then Fixed Income securities and then Equities.

WobblyMarshmallow

Stealth11mo

Can you give me a ratio on Fixed Income-Equity here? Also, in terms of maxing out on tax free income, would you recommend ELSS or PPF?

SwirlyHamster

Morgan Stanley11mo

(100-age )% in equity & age % in debt is a decent thumb rule

FuzzyNoodle

Stealth11mo

"Maximum risk" - mid cap growth

WobblyMarshmallow

Stealth11mo

Have invested heavily into a Mid Cap Growth already!

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