Model Portfolio

How to Build a Model Portfolio for Wealth Creation?

Value investing is an investment paradigm that involves buying securities that appear under-priced by some form of fundamental analysis.

The early value opportunities identified by Graham and Dodd included stock in public companies trading at discounts to book value or tangible book value, those with high dividend yields, and those having low price-to-earnings multiples, or low price-to-book ratios.

High-profile proponents of value investing, including Berkshire Hathaway chairman Warren Buffett, have argued that the essence of value investing is buying stocks at less than their intrinsic value.

A Value investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.

A Model portfolio can be build on following criteria

GOALS

Long-Term Goals

Short-Term Goals

 

Age Group

15-30

30-45

45-60

60-80

 

Age Group 15-30 (Not Much of Responsibility)

• Should invest more than they spend
• Can be risk takers

 

Portfolio Should Have –

• Should invest more than they spend 
• Can best Risk Takers

 

Portfolio Should Have –

• 30% LARGE CAP
• 30% MID CAP
• 40% SMALL CAP

 

Age Group 30-45 

• Life Enters In a Stable Zone
• With School Going Children
• More Responsibility 
• Should invest atleast 20% of their income

 

Model Portfolio

• 50% LARGE CAP
• 30% MID CAP
• 20% SMALL CAP FOR GROWTH

 

Age Group 45-60

• Children getting ready for higher education and marriage
• Usually it’s a time to withdraw your savings.
• But if you still have surplus money then invest as follow

 

Model Portfolio

• LARGE CAP 60%
• MID CAP 30%
• SMALL CAP 10%

 

Age Group 60-85 and Above

• No-Risk Takers. It’s important to not to take risk at this time.
• Although less responsibility as children are grown-up and working.
• they should invest in Only Large Cap Stocks
• Debt Funds or Bank FD’s

Disclaimer: All the information here in this article is for educational purpose only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. We are sharing our inputs for to educate traders and investors with no guarantee of gains or losses on investments. Please learn and analyze your stocks by yourself or you can contact to your financial advisor.