Investment FAQs with Parimal Ade (Investment Satsang – 02)

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Here are some questions asked by the viewers in the Investment Satsang dated 19th March 2021. These questions can provide you insights on some grounds. Please read these questions for knowledge purposes only and make any investment decisions only based on your research or the advice of your financial advisor.

Q Should we invest more in NASDAQ at these levels?

Parimal Ade-
From a diversification point of view, 10%-15% allocation towards the US stocks can be good.

Q Reading Value Investing by Mr. Parekh, writes that by investing at peak of markets we miss speculative returns. Your take?

Parimal Ade-
Normally, when markets trade at a peak, so lumpsum investment could not meet your expectation.
In peak, it is better to go through staggered investment and not with lumpsum.

Q HDFC Life for the long-term at Rs. 625 Average. Is it good after LIC IPO? How to check growth and earning visibility of Stock?

Parimal Ade-
One should look at the reports of the rating agencies, regulators, industry outlook, Government targets on the industry, etc.
Then one should look at the players of the particular industry.
LIC IPO will certainly impact HDFC Life and other life insurance companies post issue as it will be listed with heavy market capitalization.

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Q Suppose the Market Cap of a company is Rs. 1 Cr. Can a retailer investor buy 100% of that company? Can an Investor become a Board member of any company?

Parimal Ade-
An investor can buy only that many shares that are available in the market.
It is quite possible, there can be a hostile takeover. For Ex. L&T Infotech and MindTree.

Q Are direct SIP through brokers is safe in long term for 20 years. What if they shut down?

Parimal Ade-
SIP is not with brokers, it is directly with AMCs. Brokers just facilitate transactions. Yes, they are safe.

Q Your views on ITC and United Spirits?

Parimal Ade-
Both stocks have good earning visibility as involve consumption story.
ESG parameter is the only matter of concern here.

Q There is so much buzz in silver investment, is buying Silver ETF from the USA good at present?

Parimal Ade-
Commodity follows a cyclical pattern. One should be aware of such cycles.
From a diversification viewpoint, some allocation on commodities is good.

Q All good companies have shot up 3-5x in the last few months. Worried about price fall due to profit booking. How to approach investing now?

Parimal Ade-
If you have stocks that went up 3-5x, then if you are doing an investment to attain some goal, and with this growth, it may have achieved the goals as well. So it will be better to park your funds into the debt side now for capital protection.

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