With the Coal India IPO generating significant listing gains for investors, and the Indian markets continuing to hold above 20,000 on the Sensex and 6,000 on the Nifty, there may be a sense of feeling left out of the “India growth story” amongst a lot of Indian investors over the last few months.With memories of the big correction in equity markets still fresh in the minds of Indian investors, there has been a steady decline in holdings by individual investors in equity – both in their direct equity portfolios and mutual fund holdings. This has also been accompanied by investors awaiting a correction to enter/re-enter the markets, which has been elusive thus far. We think it’s a good time for investors to revisit their equity strategy at this point and get clarity on how they wish to participate in the wealth generation pot-ential that the Indian economy and equity markets pre-sent over the next 10 years.

Clean up
As a part of the clean-up ritual that accompanies Diwali, we think it’s also a great time to clean up equity portfolios. We have found that investors continue to hold on to losing stocks till they recover their purchase price, which should not drive their hold/sell decisions. Sell all the holdings that you are not willing to buy afresh. Sell all components of the portfolio that do not have at least a two per cent weightage in your overall portfolio, as the gains/losses from those stocks are unlikely to have a material impact on your overall portfolio.

Core and trading portfolios
Most investors do not separate their core portfolio that is being created to meet longer-term financial goals, from their satellite portfolio that is being created for short-term tactical gains. As a result of this, core/investment portfolios tend to be sold when markets move up while satellite/trading portfolios tend to be held for longer periods, especially if they are below purchase price. It is crucial to clearly distinguish these two portfolios and run each of theseportfolios as per their respective strategies. Take professional help if you are unable to do this yourself. Avoid buying on tips/SMSes and understand what you are putting away your hard earned money into, even if you are buyingshorter term. Think about it — would you not check on the best option for your flight to Dubai versus your flight to NewYork, just be-cause the flight is shorter?

Scientific weitages
Remember the hottest sectors of this decade, technology in 2000 or real estate in 2007. Investors were highly overweight in these sectors during this period and lost significant amounts of money. No single stock should exceed 15 per cent of the portfolio and no single sector should exceed 25 per cent of the portfolio in our opinion. At the same time, take meaningful exposures to stocks that you buy so that the overall portfolio impact of the purchase can be significant. Ensure that each stock that you buy for your core portfolio has at least a five per cent weightage. Empirical evidence indicates that there are no significant benefits of diversification beyond 15-20 stocks in a portfolio.

Brokerage
Pay your adviser according to the advice and services that he provides, so that he does not churn your portfolio unnecessarily. Share your complete portfolio with your adviser, so that advice given can be holistic.

Vishal Dhawan is a certified financial planner by profession and founder of Plan Ahead Wealth Advisors Pvt. Ltd. He can be reached at vishal@planaheadindia.com.
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Crude fell in Asian trade as a firmer dollar discouraged investors from buying oil futures. New York's main contract, light sweet crude for December delivery fell to $86.85 a barrel.

Earthmoving equipment manufacturer JCB India Ltd is expecting that the industry would grow by 20 per cent during 2010. In 2009, the company sold 13,000 units.

Educomp Solutions consolidated net profit stood at `57.8 crore for the quarter ended September 30, 2010. It had a net profit of `115.5 crore in the July-September quarter last year.

HCL Technology open-ed a new technology centre in Haryana with an investment of `260 crore which will help to provide uninterrupted network. The centre will employ 3,200 people.