Portfolio consolidation

POSTED BY Karthik ON October 15, 2010 3:54 am COMMENTS (5)

My portfolio is too diversified. I have too many(around 60) stocks of value less than 20K in a portfolio which is worth around 25 Laksh. I picked these stocks up based on my own research. But over time it is becoming difficult to manage this. I want to consolidate this into less than 20 stock portfolio. How would I go about doing it? 

5 replies on this article “Portfolio consolidation”

  1. bharat shah says:

    i think , whether the equity share performed, is to be seen its performance with that of relevant index performance. that will give you idea which is better. if your portfolio as a whole does not perform better than the relevant index, it is better to change the track from direct equity to diversified mutual fund route.or to invest in direct equity shares with help of some advisory concern. for both the cases, the most essential requirement is ‘long term investment horizon.’

  2. Kiran Srirama says:

    Ideal size of the portfolio should be the the size you are comfortable tracking (analyze, research and follow up).

    One thumb rule is list the stocks in the order of performance and dispose the stocks from the last or perhaps switch it to better performing stocks in your portfolio.

    1. Karthik says:

      Thanks for your comment Kiran. I like your approach. But one issue which I can think of with it is, I will end up selling low valuation stock and end up buying stocks at higher valuation. Is that not correct?

      1. Kiran Srirama says:

        The fact that you are selling a stock means you do not want to own it for long term 🙂

        Some (Many?) MF schemes also wouldn’t have 60 stocks in their portfolio, you may want to check how your portfolio is growing by comparing to some of the good MF schemes.

      2. Jagadees says:

        @Karthik
        I would say this is best time to get out of all the lousy stocks with bad fundamentals in ur personal MF portfolio 🙂 (note: am not asking u get rid of less returning stock, instead am asking to get rid of stocks with bad fundamentals because less returning stocks are not always bad stocks). Park those funds in some liquid funds and re-enter into ur good stocks at lower price when market tanks.
        I would say 12-15 stocks is the ideal portfolio to maintain.

        Happy investing 🙂

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