Most new traders will have this querry. I have my investment portfolio, mutual fund portfolio,real estate portfolio and trading portfolio. All the four are independent.
Traders can make very good returns but I ask a question to me can I scale up trading ? Meaning I am suppose ok trading on 15-20 L capital but can I trade on more than 1 crore capital ??The answer for me is a bit difficult. And even if I make 20-25% return per annum, I will make big profits....so not after those 300 % return magic traders. I am not saying they cannot make high returns but for me 20 % pa is more than enough to increase my wealth.So I believe that diversification is the key.I am no more in capital generation so why take undue risks and risk my family's financial future which is absolutely secured as of now.
Smart_trade
Dear St dA
I have read this post of yours & subsequent many post regarding to this topic..i am totally agree with you..it will be very difficult to scale up in trading..i have ponder on it & I have some points to mention & some queries to ask for comprehensive financial planning..
1) I like this concept of 4 type of portfoilo..trading,investment,mutual fund & real estate..new traders first need to make trading capital..as you mentioned, suppose , trader is trading with 20 lac capital..so average return for a month is 20%..so its 4 lac/ month income, which is good..
so should we trade after that mark with same capital..or how much can we scale up in intraday trading as well as swing trading ? i mean how much MAXIMUM capital should we allow to allot to trading ?
2) if we reach at maximum capital in trading..so should we trade with same capital alwys?
3) If we reach at maximum limit in trading..so now we will go to other investment instruments like investment, MF & real estate...so is it some order of enter into it? like first we should go for investment ( buy shares for at least mote than 1 year, so no tax on profits on capital )..but as its also equity..so how much should the maximum limit of investments?
4) how much percent of your wealth should we allot to mutual funds..? or amount to it?
5)there must be a limit to your total exposure to Equity market( trading,investment & mutual fund combined three )..what should be that limit..it says, it should be 100-age % fo your total wealth..ex if my total net worth is 1 crore, so if my age is 30..i should be alooted 70 lacs to equity & other risky products..thats academic facts..whats the practical alootment should be?
6)after equity, should we allot other saving/investment into real estate..if we have 1 house for live, should we allot extra money to some other income generating business?
your expereince sharing regardign this matter is very important to us..right now is trading hours..please reply whenever you have time
thanks