It’s time to present the first update of my Financial Target 1 which is to build a corpus of INR 1,00,00,000 in my investment account in 4 years time. The intent is to publish the progress or even the lack of it on this blog every quarter. The corpus would then be used to generate steady passive incomes and hopefully it would be the stepping stone to financial independence or as I have coined it a ‘Self Financed Life’.
My portfolio is overweight on equities and the money is invested through mutual funds. Over the years I have substantially increased the amount into these funds, starting from 15k per month back in 2011 to 93k in 2016. The money is auto debited from my saving account into 7 mutual funds every month on specified dates. I could probably do with 4, but the reason is to diversify, I will have a separate post on this aspect sometime.
2016 Q1 Overall Summary (Currency: INR)
- Investment Account Balance as on 1 Jan 2016: 25,41,652
- Investment Account Balance as on 31 Mar 2016: 27,50,664
- Total Amount Invested / Withdrawn in 2016 Q1: 2,80,500
- Unrealized Gain / Loss for 2016 Q1: -71,488
The portfolio has not changed much since the start of the year, shown below is the portfolio as of 31 March 2016.
The portfolio as can be seen is heavy on equities while debt makes up only a small part and that’s very intentional. I have stopped investments in gold and have decided to buy only on sharp dips also ensuring not to exceed 5% of my overall portfolio.
Detailed Review – My Observations
The markets had been down in first two months of 2016 and has seen a slight recovery in March. In the chart below, I have plotted how the funds have performed vs. CNX Nifty 50 index. For this I have plotted the Net Asset Value (NAV) of the funds vs. the index. The NAV of the funds and the index has been normalised to its values on 1 Jan 2016 to have fair comparision.
- A couple of funds have been able to replicate the index which is shown in ‘black’. I am not concerned as this is just a single quarter analysis. It may seem that an Index fund might do the same job as my chosen actively managed funds. But historically actively managed funds have been superior.
- I am more than happy to see markets down at this stage as this enables buying of more units and considering my target date is approximately 4 years away I would like to see more if such dips right now rather than later.
- Numerically the overall portfolio is up thanks to my investments, but the returns for this quarter are in red at -2.81%.
- The progress towards my target is at 27.5%. Achieving the target within the set timeframe is going to be tough as the returns from the markets are volatile. Hence different backup plans and strategies needs to be chalked out.
The next update would be in July 2016. By then I shall have an improved format for the quarterly report-out, but the only guarantee I cannot offer are the fund returns. 😀