How many companies I should have in my Portfolio?

08 February 2015

How many companies I should have in my Portfolio?

Greetings from Hitesh! As a part of investor education – we keep inviting questions normal investors may have and we try to answer the same through our blog. If you also have such questions – you can write to us. We will surely reply as the time permits. Let me deal with the above question.

There can be many questions related to the above one. E.g. How many asset class I should invest in? Should I invest in stocks / real estate / bullion / mutual funds and things like that? I am trying to deal all of the questions through current post so that it can help you decide about your portfolio mix.

Let me share Russian Experiments with GOD:-

After Bolshevik Revolution in 1917, Russia started talking about communism. Bolshevik means communist. They put ban on worshiping GOD. They broke all Temples of their time. Today 5^th generations of the Russian do not believe in GOD. They do not believe in SOUL. They do not believe in Religion.

Same way we have a legacy of 5000 plus years and we have been told about GOD. We believe in GOD.

The point I am driving is SIMPLE – we do not know the reality. We have not searched the answers ourselves. We have not seen the TRUTH. All we do is to follow noise made by scriptures/ so called GURUS and Preachers.

Another off shoot of the above is – all considers their GOD as the best and they fight with each other to prove their GOD’s supremacy.

How does this affect your Investments?

If you look at the financial History post 1929 depression – investment guys started taking about Diversification. The talked about investing in different asset classes and diversification among particular assets class. 

Eg. If you have Rs.1 Cr, you may invest Rs.25 lakhs in bullion/ Rs.25 lakhs in shares / Rs. 25 lakhs in Property / Rs. 25 lakhs in Bank FDs.

Now you divide Rs.25 lakhs in each category to different things. Say you buy gold/ gold jewellery/ Siver bars / silver utensils / diamond jewellery etc while you invest in Bullion. Same goes for all other categories also.

If you read the above it looks most logical and practical. Isn’t it? We have already completed 80 years of the above invention. We are running 4^th generations of investors. All throughout our study we have been told about DIVERSIFICATION and we are blindly following the same and living under false feeling of security!!

Take any media expert / your broker/ your financial advisor –they all talk about diversification to you. This keeps on reinforcing your belief about diversification.

Belief V/s Seeing:-

If you visit any religious place – you will see more and more senior citizen over there. We feel happy that so many guys follow GOD and religion but the reality is different. They have developed an acute fear of death and to forget that they go deep in to the religion or at least try cheat their mind for the time being. (my experiences shows that 99% will be falling in this category).

Their falls sense of security with their money/ family and assets crashes like a building made with pack of cards.

Same way normal investors get panicked, in spite of diversification, when the market falls.

The challenge is to see the things yourself. Not believing. Once you see yourself – life and investments will become easy for you.

How to apply this to Investments?

I am not for diversification or against diversification. I am asking you to decide your own truth. This can happen only and only when you know yourself. You need to SERCH for yourself rather than GOOGLE it.

Without knowing yourself – whatever you do – will be useless and you will feel frustrated at the end of the life when death knocks you.

What Next?

We always go beyond the established rules while dealing with our clients. We want to make them think on their own. We want to make them independent in true sense of the word. Our job is of a CATALYST.

If you love to be independent in all areas of your life – I invite you to be with me. Join me.

Have a Super Sunday.

Follow me on Twitter @hiteshmparikh Or on Whatsapp - +91-9869425399.

Live With Passion…Invest With Passion.

Hitesh Parikh.