Investing Today: Rishi Nathany

I had redeemed all my equity investments in the one-week market rally in January this year. My entire portfolio is worth Rs 3 lakh and is in debt now. Given the present market conditions, should I start investing in equity funds again?
Portfolio allocation depends on one’s age, life stage and risk profile. While it’s not possible to comment on your specific allocation, since you have not mentioned these details, in a standard investment portfolio, there should be allocation to various asset classes such as fixed income, equities, bullion, real estate and insurance, but in varying percentages depending on one’s personal situation. The asset allocation can be strategic or tactical, depending on one’s investment preference.

It seems you favour a tactical asset allocation, since you have moved out of equities into fixed income and are now seeking to re-enter equities. This strategy can be very beneficial in case you manage to time your shifts from equities to fixed income and vice-versa correctly.

However, this is practically quite difficult and you could lose out on gains, in case your timing is incorrect, especially for such short-term movements. Having said that, given the current valuations of equities, one could look at adding them to one’s portfolio for the long term.

I am 38. My portfolio of Rs 15 lakh has only 10 per cent debt, rest is in equity (stocks and mutual funds). I want to increase my debt holding for more safety. Are fixed maturity plans (FMPs) a good option? I have a two-three year horizon. Please advise.
FMPs can be a good option. Given your investment preferences. There are several FMPs available from time to time. Given the fact that the interest rate cycle seems to have peaked and your investment horizon is around two-three years, you could opt for longer tenure FMP of two-three years, so that you are not exposed to the reinvestment risk of shorter duration FMPs, in case interest rates come down in the interim.

I have been investing in equity and debt funds for 15 years. I want to allocate a small part of my money to stocks. Which ones would you suggest to a new stock investor?
While I would not like to comment on individual stocks, I suggest a new investor puts his money into tried and tested blue chip stocks with proven performance, robust business models and quality management, which are available at reasonable valuations.

Direct investing in equities requires proper research. In case you feel you are capable of doing this yourself and have the requisite time in hand, only then should you invest in equities directly. Otherwise, you should leave the job to professional fund managers, as you have been doing in the past.

Rishi Nathany, CEO, Dalmia Securities, answers your questions
Views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in