Portfolio

Portfolio for the month of October 2024.

Our investment philosophy combines gold and silver commodities as a hedge against macroeconomic factors, while also serving as a part of our wealth generation strategy. Our portfolio includes mid-cap banks, the Nifty index, and the Nifty IT index, along with a selection of blue-chip stocks such as HDFC Bank, Wipro, and Kotak Bank, which have been undervalued for several years.

We invest with a long-term perspective, focusing on building assets that benefit from the power of compounding. Our strategy involves generating cash flow through covered call options on the index. Additionally, the entire portfolio is hedged with a cost of 3% of portfolio value.

We also utilize options as a means of wealth creation, employing a suitable amount of leverage. This approach offers downside protection through hedging, complemented by the covered call strategy, creating a strong combination for wealth generation and cash flow.

Our overall portfolio value currently stands at ~6.25 crores. Completely hedged against downside. This 10% correction in the month of October 2024 was a test for our strategy and investment philosophy.

Midcap position

recent correction in the markets has brought down our overall portfolio value. Our midcap ETFs make for 32% of our portfolio. Our long position in future has corrected 10% and we are still in profits, periodic selling of Call options in Midcap has given a profits of 84,000 rupees. Because of covered call strategy This downfall in midcap is profitable even though our gains eroded by 10%.

We are still holding long position in midcap in futures.

Hedged position

Our hedged cost is 3% of our portfolio. Downside is fully protected at Nifty 24000 levels. Any fall in Nifty below 24000 will be profitable. Hedge at 26000 and 25000 was profitable by 500 points each. Portfolio is in profits even though markets have corrected by 10%.

Nifty Dec 25000 CE - open short position

Nifty DEC 25000 PE - position closed

Nifty DEC 26000 PE - position closed

Nifty DEC 24000 PE - position closed

Nifty November Future – position long

We are considering adding Reliance and increase the share of silver in our portfolio. Since silver has corrected sharply by more than 15% and also it’s option premium are highs at this moment. We are considering selling ITM Puts which provides 3% extra premium at this time which is 14th November 2024.

The rationale behind adding Reliance; Reliance industries ltd has corrected sharply in last 10 trading sessions and overall it has fallen 20% from recent highs. At this point of time fundamentals are attractive and this price correction is majorly attributed to continuous selling from the foreign institutions. Utilising this opportunity we are allocating 5% to Reliance Industries.

Silver future prospects are much promising as the demand for silver will peak around mid of 2025.