When people used to show me their portfolio I would just say “sustainable” or “non-sustainable”. These days I don’t do even that. I just say No comments.

When I was advising I used to suggest a bunch of equity schemes. I largely believe that your debt requirements are met by PPF, savings account, and a couple of short or ultra short bond funds. I rarely suggest long term funds like Gilts. Not that there are not enough funds. Just that  I did not trust them to do a good job in duration management – so the 10 year duration funds like Gilt scared me. I still get scared with longer duration funds. At least one debt fund manager is now on his own and managing portfolios. He was a jerk with dramatic under performance in debt funds!

I recently rejigged the portfolio of a 74 year old man. I put into one index fund, one ultra short debt fund, and bought him a LIC pension. No bank fixed deposit – except Rs. 3L broken into 3 fixed deposits in 3 banks. Seeing his health I think his capital of Rs. 55 lakhs will outlive him. Of course he will be in trouble if he lives too long. However, I do think his pension of Rs 11,000 and this corpus will more than see him through. He lives in a senior citizen home and has a safety net – his son is rich enough to pump money in case he needs. Son, as you expected, is abroad and has no intentions of coming back. This man has NOBODY IN INDIA – his only sister is dead and her daughter is in Australia. She calls him once in a year. She has married an Australian. End of story.

Sorry I digressed.

My father had a far more complicated portfolio, no debt – except 3-4L in bank fixed deposits. His dividend income was 3x his annual expenses – even with nursing help.

But hey, I was handling it for him.

As a person who gets older it is necessary to simplify ones portfolio and keep things that we understand. Or have an adviser / broker whom you can trust. My adviser is 4-5 years elder to me and we have a relation ship going back 40 years. I have said it many times – the value of a good adviser cannot be emphasized enough.

When I do my own investments I know that I have a far greater ability to lose money. I also have a current cash flow which allows me to experiment more than what you may be willing to lose. I rarely make losses while investing, but I do make losses while trading. My investing losses are more of waiting time is more than I expected to. I rarely get too much into a company’s business even it is for a long term investing. I have some very simple companies like Nestle, Colgate, Gillette, LMW, LG Balakrishnan, Hdfc, Hdfc bank, TaMo, Chola – if you see these are all simple businesses….of course I have some complicated business like Biocon too. However that is based on research by a friend. I am just a beneficiary of his research. Pharma is something where I am dependent completely on him…so God bless him…and may he outlive me!!