The Acid Test of your Stock Portfolio

Can your stock portfolio pass this Acid Test?

“Do you advice on stocks?” This was Deepesh on the line.

“No Deepesh, not my forte. For me, it is simple. There are some really good fund managers out there who can do a better job. I rather let them manage my money.”

“Oh OK. You see, I am already doing a good job with my portfolio. I just need a second view on my current holdings.” Deepesh didn’t sound impressed with what I had told him.

“That’s great Deepesh. You are from very few people who have claimed that they have made money by investing in stocks. Let’s do a little thing, if you will.”

“Tell me.”

“Have you ever calculated how much money you have actually made on your stock investments – return on the investment?”

“Not really. But as I said I have made a decent money. I guess it should be close to 15% year on year.”

“Wow! That’s a great number. But let’s confirm it. Can you share your stock portfolio transaction details with me? I will do the maths for you.” I told Deepesh.

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The Acid Test for your Investment Portfolio

acid test for your investment portfolio

“How do you know if your investment portfolio is doing well?”

I usually get a range of responses to this question. They start from “ummmmm (which means I have no idea)” to “when it delivers the best returns“. The latter also means “I have no idea” but with an attempt to sound smart.

Very few investors are aware of what makes their investment portfolio worthwhile. Let alone that, they don’t even know what is their portfolio return. They know their FD return, PPF return, NSC return, but portfolio return?

You would realise that the ‘portfolio return’ is one of the key numbers that tells you if your investment portfolio is really working for you or not.

Today, let’s set aside all our excuses and do an acid test on your investment portfolio.

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