It's your wealth.
And you should know what's happening with it. For a long time, investors have been confused with numbers and jargon used by experts that mean very little to the investor themselves. It's time you understood every little detail about your portfolio while giving you the answer to the main questions.
- How close am I to my financial goals?
- What's helping me get there right now?
- How can I get there more efficiently?
The Stack Report will be sent to your registered email between the 5th & 7th business day of every month. It gives you more than just the current performance of your portfolio. We give you our insight along with advice on how you can optimize your portfolio further.
The report is simple, easy to understand and filled with strong visuals. It's comprehensive and straightforward at the same time. These are the main factors in the report that determine your portfolio's health.
- Asset Split
- Sectoral Split
- Market Capitalization Split
- Credit Quality of Debt Assets
- Deposit Insights
Let's understand these one at a time.
1. Asset Split
An asset is any financial product purchased to generate some income on a long or short-term basis. Your portfolios focus on 3 main kinds of assets.
Equity
Equity is the amount of capital invested or owned by the shareholder of a company - you. The worthiness of equity is based on the present share price. Stocks and equity usually mean the same thing.
All stocks are a type of equity because they grant an ownership stake in the company. However, equities don't always refer to stocks because equity can take other forms, such as private equity.
Debt
Yes, 'debt' sounds like a weird investment to new investors. But it's one of the safest forms of investment.
Debt investment refers to an investor lending money to a firm or project sponsor with the expectation that the borrower will pay back the investment with interest. This is where the creditworthiness (the timeliness of debt repayment based on historic data) of the borrower comes into play.
Gold
This isn't very new. But what you should know is that gold is the most considered investment to hedge your portfolio against inflation. Stack portfolios invest in Gold Mutual Funds. Gold mutual funds offer the combined benefits of investing in physical gold and professional fund management.
2. Sectoral Split
The sector breakdown of a portfolio shows how much of your assets are allocated to what industry sectors. Sectors typically are considered to be broad classifications such as manufacturing, financial, healthcare, FMCG, Energy, Materials or IT.
3. Market Capitalization
Market cap—or market capitalization—refers to the total value of all a company's shares of stock.
It allows investors to understand the relative size of one company versus another. Market cap measures what a company is worth on the open market, as well as the market's perception of its future prospects because it reflects what investors are willing to pay for its stock.
Small-Cap Companies: Up to Rs.500 crore (High Return, High Risk)
Mid-Cap Companies: From Rs.500 crore up to Rs.7,000 crore (Good Returns, Medium Risk)
Large-Cap Companies: From Rs.7,000 crore up to Rs.20,000 crore (Steady Returns, Low Risk)
4. Credit Quality of Debt Assets
The term credit quality refers to a quantified assessment of a borrower's creditworthiness in general terms or with respect to a particular debt or financial obligation.
Credit rating levels are as follows - AAA, AA, A, BBB... till D (being the lowest). These ratings are based on S&P, Moody's and Fitch's scales.
Factors that influence credit rating
- The organization's payment history, including any missed payments or defaults.
- The amount they currently owe, and the types of debt they have.
- Current cash flows and income.
- The market outlook for the company or organization.
- Any organizational issues that might prevent timely repayment of debts.
5. Deposit Insights
There are two ways to invest - SIPs and Lumpsums. SIPs are a form of periodic investment (usually every month) and Lumpsums are one-time investments. Generally, SIPs beat lumpsums. A smaller amount invested every month beats investing a huge sum in one go.
This is mainly because of "Rupee Cost Averaging" - investing a fixed amount every month ensuring that you buy more units when the markets are low and lesser units when they are high.
Deposit insights tell you how much you have contributed to your portfolio through SIPs versus lumpsums over the past few months.
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