• MUTUAL FUND
  • INDEX FUND
  • ETF
  • PMS
  • AIF
  • PARTNERS
  • INVESTOR EDUCATION
  • INTERNATIONAL BUSINESS
  • Home
  • Blog
    Riding market trends with Momentum Investing

    Riding market trends with Momentum Investing

    What is Momentum Investing – A Simple Explanation

    What is Momentum Investing – A Simple Explanation

    The Basics of Passive Investing — Understanding Index Funds

    The Basics of Passive Investing — Understanding Index Funds

    How to Invest in Index Funds

    How to Invest in Index Funds

    Large-cap Stocks, Small-cap Stocks, Mid-cap Stocks — What is the difference?

    Large-cap Stocks, Small-cap Stocks, Mid-cap Stocks — What is the difference?

    Nifty 50 Index Vs Nifty 500 Index – A Beginner’s Guide

    Nifty 50 Index Vs Nifty 500 Index – A Beginner’s Guide

    Mutual Fund AUM: Unveiling the Backbone of Investment

    Mutual Fund AUM: Unveiling the Backbone of Investment

    Mutual Fund Taxation – Are Mutual Funds Taxable?

    Mutual Fund Taxation – Are Mutual Funds Taxable?

    Secure Your Retirement Years with Mutual Funds

    Secure Your Retirement Years with Mutual Funds

    Trending Tags

    • Videos
      Understanding the different Mutual Fund categorizations by Market Cap

      Understanding the different Mutual Fund categorizations by Market Cap

      Investing in Lumpsum or SIP

      Investing in Lumpsum or SIP

      Performance be a by-product

      Performance be a by-product

      What is Real Investing and why it requires grit and stubbornness?

      What is Real Investing and why it requires grit and stubbornness?

      5 Reason to Boost your SIP

      5 Reason to Boost your SIP

      Understanding the types of Mutual Funds

      Understanding the types of Mutual Funds

      Why SWP is wise decision than investing in Fixed Deposits?

      Why SWP is wise decision than investing in Fixed Deposits?

      Why you should diversify your portfolio?

      Why you should diversify your portfolio?

      What is NAV

      What is NAV

      Trending Tags

      • Mutual Fund Basics
      • Financial Goals
      • Asset Allocation
      • Basics of Investing
      • SIP
    • Podcast
      Ep. 13: Wisdom Tree (Part 2)

      Ep. 13: Wisdom Tree (Part 2)

      Ep. 12: Wisdom Tree (Part 1)

      Ep. 12: Wisdom Tree (Part 1)

      Ep. 11: The Investor’s Playbook

      Ep. 11: The Investor’s Playbook

      Ep. 10: Evolution of Indian FMCG Sector

      Ep. 10: Evolution of Indian FMCG Sector

      Ep. 09: Evolution of Indian Pharmaceutical Sector

      Ep. 09: Evolution of Indian Pharmaceutical Sector

      Ep. 08: Value Migration

      Ep. 08: Value Migration

      Ep. 07: Wealth Creation Studies

      Ep. 07: Wealth Creation Studies

      Ep. 06: Evolution of Indian Infrastructure & Capital Goods Sector

      Ep. 06: Evolution of Indian Infrastructure & Capital Goods Sector

      Ep. 05: Evolution of Indian Automobile Sector

      Ep. 05: Evolution of Indian Automobile Sector

      Trending Tags

      • Basics of Equity
    • 5 Keys of Investing
      5 Key points to keep in mind for budding investors

      5 Key points to keep in mind for budding investors

      5 Key ways to handle market volatility

      5 Key ways to handle market volatility

      5 Key New Year resolutions for investors

      5 Key New Year resolutions for investors

      5 Key situations and errors to be avoided by investors

      5 Key situations and errors to be avoided by investors

      5 Key investing lessons from the Mahabharata

      5 Key investing lessons from the Mahabharata

      5 Key investment lessons we could learn from Holi

      5 Key investment lessons we could learn from Holi

      5 Key reasons why ELSS could be preferred over other tax-saving options

      5 Key reasons why ELSS could be preferred over other tax-saving options

      5 Key benefits of investing via Mutual Funds over direct-equity investing

      5 Key benefits of investing via Mutual Funds over direct-equity investing

      5 Key mistakes investors should avoid while investing in ELSS

      5 Key mistakes investors should avoid while investing in ELSS

      Trending Tags

      • Basics of Investing
      • Basics of Equity
      • Financial Goals
      • Index Fund
      • Asset Allocation
      • SIP
      • Mutual Fund Basics
    • Wealth Creation Thoughts
    • Master Circular for ODR
    No Result
    View All Result
    • Home
    • Blog
      Riding market trends with Momentum Investing

      Riding market trends with Momentum Investing

      What is Momentum Investing – A Simple Explanation

      What is Momentum Investing – A Simple Explanation

      The Basics of Passive Investing — Understanding Index Funds

      The Basics of Passive Investing — Understanding Index Funds

      How to Invest in Index Funds

      How to Invest in Index Funds

      Large-cap Stocks, Small-cap Stocks, Mid-cap Stocks — What is the difference?

      Large-cap Stocks, Small-cap Stocks, Mid-cap Stocks — What is the difference?

      Nifty 50 Index Vs Nifty 500 Index – A Beginner’s Guide

      Nifty 50 Index Vs Nifty 500 Index – A Beginner’s Guide

      Mutual Fund AUM: Unveiling the Backbone of Investment

      Mutual Fund AUM: Unveiling the Backbone of Investment

      Mutual Fund Taxation – Are Mutual Funds Taxable?

      Mutual Fund Taxation – Are Mutual Funds Taxable?

      Secure Your Retirement Years with Mutual Funds

      Secure Your Retirement Years with Mutual Funds

      Trending Tags

      • Videos
        Understanding the different Mutual Fund categorizations by Market Cap

        Understanding the different Mutual Fund categorizations by Market Cap

        Investing in Lumpsum or SIP

        Investing in Lumpsum or SIP

        Performance be a by-product

        Performance be a by-product

        What is Real Investing and why it requires grit and stubbornness?

        What is Real Investing and why it requires grit and stubbornness?

        5 Reason to Boost your SIP

        5 Reason to Boost your SIP

        Understanding the types of Mutual Funds

        Understanding the types of Mutual Funds

        Why SWP is wise decision than investing in Fixed Deposits?

        Why SWP is wise decision than investing in Fixed Deposits?

        Why you should diversify your portfolio?

        Why you should diversify your portfolio?

        What is NAV

        What is NAV

        Trending Tags

        • Mutual Fund Basics
        • Financial Goals
        • Asset Allocation
        • Basics of Investing
        • SIP
      • Podcast
        Ep. 13: Wisdom Tree (Part 2)

        Ep. 13: Wisdom Tree (Part 2)

        Ep. 12: Wisdom Tree (Part 1)

        Ep. 12: Wisdom Tree (Part 1)

        Ep. 11: The Investor’s Playbook

        Ep. 11: The Investor’s Playbook

        Ep. 10: Evolution of Indian FMCG Sector

        Ep. 10: Evolution of Indian FMCG Sector

        Ep. 09: Evolution of Indian Pharmaceutical Sector

        Ep. 09: Evolution of Indian Pharmaceutical Sector

        Ep. 08: Value Migration

        Ep. 08: Value Migration

        Ep. 07: Wealth Creation Studies

        Ep. 07: Wealth Creation Studies

        Ep. 06: Evolution of Indian Infrastructure & Capital Goods Sector

        Ep. 06: Evolution of Indian Infrastructure & Capital Goods Sector

        Ep. 05: Evolution of Indian Automobile Sector

        Ep. 05: Evolution of Indian Automobile Sector

        Trending Tags

        • Basics of Equity
      • 5 Keys of Investing
        5 Key points to keep in mind for budding investors

        5 Key points to keep in mind for budding investors

        5 Key ways to handle market volatility

        5 Key ways to handle market volatility

        5 Key New Year resolutions for investors

        5 Key New Year resolutions for investors

        5 Key situations and errors to be avoided by investors

        5 Key situations and errors to be avoided by investors

        5 Key investing lessons from the Mahabharata

        5 Key investing lessons from the Mahabharata

        5 Key investment lessons we could learn from Holi

        5 Key investment lessons we could learn from Holi

        5 Key reasons why ELSS could be preferred over other tax-saving options

        5 Key reasons why ELSS could be preferred over other tax-saving options

        5 Key benefits of investing via Mutual Funds over direct-equity investing

        5 Key benefits of investing via Mutual Funds over direct-equity investing

        5 Key mistakes investors should avoid while investing in ELSS

        5 Key mistakes investors should avoid while investing in ELSS

        Trending Tags

        • Basics of Investing
        • Basics of Equity
        • Financial Goals
        • Index Fund
        • Asset Allocation
        • SIP
        • Mutual Fund Basics
      • Wealth Creation Thoughts
      • Master Circular for ODR
      No Result
      View All Result
      Motilal Oswal
      No Result
      View All Result
      Home 5 Keys of Investing

      5 Key Secrets of Focused Portfolios
      0 / 5 Rating 0 Count 0

      Your page rank:

      Other Experts by Other Experts
      September 21, 2021
      in 5 Keys of Investing
      0
      5 Key Secrets of Focused Portfolios
      2
      SHARES
      215
      VIEWS

      You must have heard, too many cooks spoil the broth. Similarly, while making a portfolio, remember, too many stocks spoil the performance of the portfolio. If you are an equity investor, in quest of knowing everything about everything you end up knowing nothing. This is more probably because your portfolio may have a higher number of stocks while you aren’t really able to concentrate on any. You don’t need 100 stocks to make money, 15-20 good names will do the trick. Wealth creation in equity is an art; let us inform you about the 5 Key secrets of focused portfolios

      Risk diversification

      Having a portfolio with multiple stocks does not really help you diversify risk. Studies show that the risk is inversely proportional to the total number of stocks in the portfolio. Let us simplify it further, the graph here shows a reduction in risk as the number of stocks rise but after 20 stocks in portfolio risk remains constant. The stocks after the first 20 will have no change in risk showing the minimal risk. Considerably, having too many stocks does not really add up to your portfolio for a long term wealth creation.

      Long Tail stocks in portfolio

      Large trash bin overflowing garbage (rotten fruit, old tires, packing of plastic, metal and glass). Trash fallen to the ground. Flies flying.

      You just need adequate quality stocks in your portfolio and then you’re set to sit tight and hold onto your holdings for years to reap the benefits. The long tail stocks bring down the quality of your portfolio and impact the overall performance of your portfolio in long-term compared to the focused stocks in your portfolio.

      Focused Portfolios have higher conviction

      Businessman sitting with his arms raised on a graph

      Too many stocks in your portfolio signify lesser conviction, hence it may adversely affect the qualitative portion of stocks in your portfolio. Focused portfolios are scientific and process driven portfolios with higher probability of being right. Unlike the long tailed portfolios, focused portfolios stick to fundamentals and it’s not a spray and pray game.

      Focused portfolios are easier to manage

      Let’s consider an example of a classroom, a smaller number of students with a similar approach to studying together would give a better overall result than a class of 100 students with different approaches to studies. This is the result of focus on overall growth of the class by the trainer. Similarly, the qualitative stocks in your portfolio may give a better overall performance when they are managed well. There is a high possibility of weakening the performance of the overall portfolio due to the stocks which do not do well and tend to be difficult to manage due to higher number of total stocks in the portfolio. Investors with a good wealth creation strategy invest in a few stocks with a great quality and manage the portfolio smartly. They do not want to try and play with the stocks that may not pass their parameters of quality. Thus having an adequate small number of quality stocks is manageable and allows higher opportunities to learn and implement strategies.

      Focused portfolios signify quality

      Businessman in first place of the podium The topics of business through images of sport and athletes in the competition. Competition success and work

      A focused portfolio must hold the stocks which possess enough potential to give higher returns. A smart investor will not want to dilute her/his concentration on the stocks that do not add a significant value even after considering the power of compounding. Quality of portfolio is also determined by adequate attention given to the stocks in your portfolio. The quality of stocks thus is one of the most important characteristics of the focused portfolios. Focused portfolio serves as a key factor in long term wealth creation. The quality of stocks and the limited number of stocks in the portfolio signify the overall good quality of portfolio and higher conviction for performance and vice versa.

      Tags: Basics of Investing

      Leave a Reply Cancel reply

      Your email address will not be published. Required fields are marked *

      Stay Connected

      Recommended Videos

      Understanding the different Mutual Fund categorizations by Market Cap

      Understanding the different Mutual Fund categorizations by Market Cap

      by Other Experts
      December 27, 2022
      0

      As you know, Market capitalization for a company, which is most commonly referred to as market cap, is equal to...

      Investing in Lumpsum or SIP

      Investing in Lumpsum or SIP

      by Other Experts
      July 22, 2022
      0

      A question that keeps coming up in your mind as an Investor is – “Whether I should invest a lumpsum...

      Performance be a by-product

      Performance be a by-product

      by Other Experts
      November 28, 2022
      0

      Many investors mistakenly base the success of their portfolios on returns alone. Few investors consider the risk involved in achieving...

      Popular Posts

      • Ep. 13: Wisdom Tree (Part 2)

        Ep. 13: Wisdom Tree (Part 2)

        1356 shares
        Share 542 Tweet 339
      • Ep. 12: Wisdom Tree (Part 1)

        1328 shares
        Share 531 Tweet 332
      • Ep. 11: The Investor’s Playbook

        1303 shares
        Share 521 Tweet 326
      • Ep. 10: Evolution of Indian FMCG Sector

        1283 shares
        Share 513 Tweet 321
      • Ep. 09: Evolution of Indian Pharmaceutical Sector

        1177 shares
        Share 471 Tweet 294

      EquitySahiHai is an investor education initiative by Motilal Oswal Asset Management to educate and empower of yourself by through a series of videos that bring to you insights from stock market & mutual fund experts.

      Follow Us

      Browse by Category

      • 5 Keys of Investing
      • Asset Allocation
      • Basics of Equity
      • Basics of Investing
      • Blog
      • Financial Goals
      • Index Fund
      • International Investing
      • Investing Behaviour
      • Mutual Fund Basics
      • Podcast
      • SIP
      • STP
      • SWP
      • Videos
      • Wealth Creation

      Latest Posts

      Riding market trends with Momentum Investing

      Riding market trends with Momentum Investing

      September 2, 2024
      What is Momentum Investing – A Simple Explanation

      What is Momentum Investing – A Simple Explanation

      August 30, 2024

      Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

      • MUTUAL FUND
      • INDEX FUND
      • ETF
      • PMS
      • AIF
      • PARTNERS
      • INVESTOR EDUCATION
      • INTERNATIONAL BUSINESS
      • Home
      • Videos
      • Podcast
      • 5 Keys of Investing
      • Wealth Creation Thoughts

      Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

      Welcome Back!

      Login to your account below

      Forgotten Password?

      Retrieve your password

      Please enter your username or email address to reset your password.

      Log In
      Are you sure want to unlock this post?
      Unlock left : 0
      Are you sure want to cancel subscription?