Investing: Paras Adenwala
I hold shares of Infosys. But, given the guidance this time, I am losing hope. Would you suggest I exit the stock? I had bought those in June 2009. Does HCL Tech look better in comparison?
Infosys has been an information technology (IT) bellwether for long. However, it is undergoing transformation after the recent exit of most of its founders. Hence, it may be worth waiting for this transformation to complete. Until then, any desired exposure in IT could be taken through TCS rather than Infosys.
A recent article said the current market is best for bottom-up stock picking. And, one should look at companies delivering on either price to earnings (P/E), earnings per share (EPS) or dividends, as these point to whether the valuation of a stock is fair or not. How do these points impact the valuation?
Yes, the stock market looks attractive for bottom-up stock picking. Dedicated promoters, strong management, robust financials and attractive growth prospects enjoy good valuations. Putting a value to a business depends on a host of factors. Hence, for an amateur investor, it makes adequate sense to utilise the services of an experienced portfolio manager or a mutual fund.
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I am 24, earning Rs 22,000. I easily save Rs 10,000 every month. How do I deploy this money to save for the future?
You may invest this money every month, in a pre-determined well-performing diversified equity scheme of any of the top five mutual fund houses, for above-average returns.
What is your take on funds that invest in multiple assets like Taurus MIP Advantage, Religare MIP and Canara Robeco InDiGo Fund? Who do these funds suit? Would you suggest investing in lifestyle/ entertainment funds?
Such multiple asset funds are yet to demonstrate sustained long-term, above-average performance. Hence, it is best to avoid such funds. The long-term history of equity fund performances indicate that diversified equity funds do better than sectoral funds. Therefore, diversified equity funds are recommended over lifestyle/entertainment funds.
The writer is managing director & principal portfolio manager, Capital Portfolio Advisors. Views expressed are his own.
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