Long term wealth creation with minimum intervention

[Smart_trade]

Last one year was exceptionally strong year for all equity mutual funds, particularly Mid and Small Cap funds....But if our investment portfolio is earning a CAGR of 20 % and above on average, we are doing fine. Last year's performance will be difficult to continue for future years but overall for 5 years period if we hit that CAGR return we, our economy, our funds are doing a good job....We will comfortably beat inflation and add to our wealth generation process...

 

[vivektrader]

Most difficult part is to make a decision and act on it, and after that follow the plan and keep conviction. That is all, no complications.

 

[timepass]

Most difficult part is to make a decision and act on it, and after that follow the plan and keep conviction. That is all, no complications.

Right.

Since last few months, I am using my self-designed formula of "From FNO to NFO" i.e. the proceeds from intraday get invested in NFOs of mutual funds.

I studied the history of hundreds of MFs and found that they reach 20-25% very fast, then find their own pace. So, instead of investing a huge amount in a few funds (which needs a lot of research), I apply for nearly all the NFOs and invest 1000-5000. Add if goes below 10 (which most of them do), then stop. Returns are multiplied when your cost goes down.

The ultimate mantra of making money from the market is "Buy low, sell high". So, lower the cost, better the compounding effect.

These days two good funds are trading below 10 - Motilal Oswal Defence Index Fund and SBI Silver ETF.

 

[vivektrader]

Right.

Since last few months, I am using my self-designed formula of "From FNO to NFO" i.e. the proceeds from intraday get invested in NFOs of mutual funds.

I studied the history of hundreds of MFs and found that they reach 20-25% very fast, then find their own pace. So, instead of investing a huge amount in a few funds (which needs a lot of research), I apply for nearly all the NFOs and invest 1000-5000. Add if goes below 10 (which most of them do), then stop. Returns are multiplied when your cost goes down.

The ultimate mantra of making money from the market is "Buy low, sell high". So, lower the cost, better the compounding effect.

These days two good funds are trading below 10 - Motilal Oswal Defence Index Fund and SBI Silver ETF.

Sectoral funds or bullion funds are cyclical, if we are out of sync with the cycle, those can underperform for long time. For example Public sector enterprise PSE was out of favour from 2010 to 2022, but recently it became more than 2.5times in less than 2yrs.

 

[timepass]

Sectoral funds or bullion funds are cyclical, if we are out of sync with the cycle, those can underperform for long time. For example Public sector enterprise PSE was out of favour from 2010 to 2022, but recently it became more than 2.5times in less than 2yrs.

Steady and reliable performers, in my study, are the ELSS and Retirement Funds and the Balanced Advantage Funds (or multi/dynamic asset ). These are the "Fill it, shut it, forget it" type of funds, and cause the least heartache. I am somewhat cautious of the various index funds.

To each his own.

 

[vivektrader]

Steady and reliable performers, in my study, are the ELSS and Retirement Funds and the Balanced Advantage Funds (or multi/dynamic asset ). These are the "Fill it, shut it, forget it" type of funds, and cause the least heartache. I am somewhat cautious of the various index funds.

To each his own.

How much returns are expected in those?

 

[timepass]

How much returns are expected in those?

The same, 18-20%.

A lot of MF research is available on this website :
https://www.advisorkhoj.com/mutual-...t ELSS Tax Saver Dir Gr&category=Equity: ELSS

Also on moneycontrol, but I don't follow that website.

There are also children's fund, but I don't have those.

 

[timepass]

All the NFOs sounds like a lot of portfolio, but you don't have to manage those. You receive the Combined Account Statement (CAS) from time to time. Also, you can download it anytime from CAMS website.

 

[timepass]

Wherever possible, I go for the IDCW payout option. I don't like IDCW Reinvestment. With time I will filter those out.

At present the NFO of Union Multi Asset is open. A little while ago there was the NFO of Canara Robeco Balanced Advantage fund.

You can check the NFOs here : https://money.rediff.com/mutual-funds/nfos

If you catch an NFO below 10 Rs, then after 5/10/15 years, the compounding effect will be a major factor. Compare Rs. 10 becoming Rs. 40, or Rs. 9.5 becoming Rs. 40

 

[vivektrader]

Top performing mutual funds over various categories, long periods. ...