Goals, strategy, tactics (and taxes)

By | 2017-11-19T03:56:23+00:00 October 12th, 2017|

Let’s speak of how we will go about our portfolio management service. We’re different: we don’t just invest in stocks. We keep a larger view on what you need to achieve, personally with wealth, in order to shape your portfolio.

Goals, Strategies, Tactics

Capitalmind has worked hard to pick stocks and manage returns. Our long term portfolio has returned 30% annualized, since November 2014, not counting dividends. But then, in this market, there’s enough outperformance everywhere. Who could you choose?

We go a step higher. Getting returns is not complex. It’s a tactic. We’re good at tactics. But everyone needs a strategy. And for a strategy, you need to know where you want to go.

We call this the “Goals, Strategies, Tactics” approach. It’s not as taxing as the other GST you know.

A Goal

First, we meet you to understand what works for you. We help you with your goals and prepare a strategy. It’s not complex, really. The idea of retirement is: “What if I have no income? Can I generate income from my liquid money?”

If you spend Rs. 100,000 per month today, You’re going to need nearly Rs. 8 crores when you retire. And you’ll be spending Rs. 320,000 per month (assuming 6% inflation, and a return of around 9% after you retire).

That’s if you retire in 20 years, and live on for another 30. (So, a 40 year old person)

Unattainable, you say? You have some money now. And you save money every month. This is where the “Strategy” comes in.

A Strategy

If you allocate money to Equity and Fixed Income, this is what you need.

Rs. 25 lakh to start with. (Forgive us, this is the minimum SEBI requires a portfolio manager can accept)
Rs. 40,000 per month going forward.

Just increase the amount you save with inflation. All you’re going to need is a 12% return. Get more, and you can retire earlier.

The Tactics

This is where we’ll do the painstaking work of figuring out what to buy, how to rebalance your portfolios between fixed income and stocks, how to allocate capital to which stock and so on. Our tactics use a lot of technology to optimize allocations and keep you on track. It’s “robo” with human supervision.

You could have different goals — children’s education, annual holidays, a “freedom” fund, an allocation for charity, whatever you choose. Our proprietary software, helps you figure out how much you need for each such goal.

And for each of them you can have a higher risk portfolio (more stocks) or lower risk (more fixed income).

We personalize, we adapt, and we optimize. That’s what Capitalmind Wealth is all about.

And yes, you could go down the traditional route of saying: just give me stocks.

This planning process helps you understand where you need to be. We then work hard to make the best from stocks, and we invest in fixed income through mutual funds. (They’re more tax effective)

Oh, Yes, Taxes.

We don’t churn. We won’t sell stocks or funds where you will have to pay taxes, unless absolutely necessary. We invest for the long term.

At some point, where we may have booked some taxable gains, we have strategies to reduce your taxes through smart tax loss harvesting and bonus stripping. We watch the markets like hawks, so we can identify and take advantage of such opportunities.

We will charge 1% as management fees, and no performance fees. Some incidental costs and taxes take the gross fees to 1.5%. Also, no entry loads, no exit charges and no lock-in. We’re very open and transparent.

Why All of This?

Money has to have a point. You’re not going to take it away when you go.

If you know you’re on track for retirement, your kids’ education, your long term holiday plans and even an expensive trip to Disneyworld in 10 years, you have less to worry about. More importantly, any more money you make is yours to spend without hurting any of your other goals.

What’s the Paperwork?

We’ll start with the planning and strategy, but the tactics need some signatures.

We’ll have a disclosure document for you to read, and an application form. We’ll have to do a “Know Your Customer” checklist (ID, address proofs if not already done with a broker) and open a demat account in your name. Our custodian (IL&FS) will need a power of attorney to operate your account, and then we can push forward on the process described above.

We’re super-excited to bring to you as soon as possible!