I have done this audit before the new year, but I am a bit late in posting here. Before getting into my 2023 audit, please have a look at my 2022 audit (if you like to).

Let’s dive now.

I have two portfolios for two of my goals: one is for my retirement (FIRE), and the other is for my short-term goals (the things that need to be taken care of in less than 5 years).

First, we will have a look at my retirement portfolio.

1. Retirement Portfolio

As i said in my 2024 new year goals post, in 2022 I achieved 5.5 lakhs of corpus for my retirement, and in 2023 I aimed for 10 lakhs, and somehow I was able to crunch it this time as well to my target corpus value.

• 2022 – 1.4 L
• 2023 – 5.5 L
• 2024 – 10 L

For some, the amount may appear small, while for others, it may appear large. But for me, it’s a decent sum when I consider where I was two or three years ago, and I feel good about having met my financial goal for the year.

Below is my asset allocation.

As I said last year, I am sticking to a 65:35 asset allocation strategy (65% in equity and 35% in fixed income). I am 27 years old, and I think I am good to have up to 70% exposure to equity, but I am still sticking to 65% equity. As of now, it is 68%; if it touches 70%, I’ll rebalance 5% from equity to fixed income.

Fixed Income

In fixed income, I have diversified into EPF, PPF, gold, debt mutual funds, and REITs, which make up 31.9% of my entire portfolio.

Previously, I added REITs to my equity asset class; I was wrong. Since REITs and InVITs offer dividends every quarter as a steady income, And it won’t grow at the speed of equity stocks; returns from REITs and InVITs will be very low. So, it is better to assume it is a fixed-income asset class.

It may seem like I have little exposure to gold, PPF, debt MF, and REITs. Yes!. But I have invested in them with the future in mind (especially during rebalancing time) and for diversification purposes.

My Target: I can’t reduce my EPF exposure, so going forward, I have to start investing more in other fixed-income assets in my portfolio. At the time of portfolio rebalancing, I can move the money to PPF and Debt MF, which may help increase their exposure. For gold and REITs, I want to keep them always less than 5%.

Equity

In equity, I have diversified into direct stock investing, equity mutual funds, and ETFs (earlier, I started trading, but I am not doing it anymore). 68.03% of equity from my entire portfolio.

Stocks – 40.09% of my equity portfolio

I had a good run in stocks last year and am sitting on a decent profit compared to the market. The CAGR of my stock portfolio is 23.33%, and the gain from dividends is 2.63%.

Equity mutual funds – 41.32% of my equity portfolio

This is where I first started, but later direct stock investing took over, and somehow this year I have managed to invest more in mutual funds to increase their exposure. The XIRR of my mutual fund portfolio is 31.1%.

Another thing is that I want equity mutual funds to have more exposure than direct stocks. Because direct stock investing is a double-edged sword. So, it’s better for me to always rely on mutual funds.

ETFs – 18.58% of my equity portfolio

I started this as a trading strategy, but later I got settled on it as a long-term investment because of its solid performance and potential to grow in the future. The CAGR of my ETF portfolio is 25.44%.

My Target: Right now, 68% of my portfolio is in equity; if it reaches 70%, I’ll take 5% from equity and move it to fixed income for rebalancing. And, high exposure in equity mutual funds (+10%).

2. Short-term goal-based portfolio

I have a few less than five-year goals; for that purpose, I am using debt and hybrid funds for this portfolio. I won’t take the returns seriously in this portfolio; anyway, money from these funds will be spent on my goals in a short span. For me, more than returns, I need money from this portfolio when there is a need for my short-term goals. There is nothing much about it. I churned around 30K in this portfolio this year.

My experience from 4 years of investing

1. Stay away from the asset class, which you don’t know much about. One of the major changes from last year in my portfolio is that I’ve exited crypto. I did it for speculation, and I ended up with a -50% loss and waited for a year to recover. There was no sign of upward momentum, so I withdrew from it. If you don’t know an asset class, don’t invest in it.
2. Don’t run behind returns. Instead of chasing the CAGR of your asset classes, focus on the CAGR of your yearly investments. Try to increase at least 10% every year compared to the previous year; this will make a huge difference in your journey to retirement.
   

   

3. Always, always, always “Pay yourself first” – Whatever your salary may be, pay yourself first. You’ve got to take one-tenth of your salary for yourself. Even if it’s less than INR 10,000, you must set aside 10%, i.e., INR 1,000, for savings or investments.
4. Have a long-term view before investing. Have a goal for your investment before starting; don’t invest and try to fit a goal into your investment.
5. Overspending habit – “Your spending will equal what you have available to spend”. Try to track your spending and limit it, or invest one-third of your salary each month. By investing one-third, you’ve done your investment right, and you can use the remaining amount for yourself.

until next time,
Peranesh xx

see previous audit,

1. Investment Portfolio of 26 Year Old | My Audit #1: 2022