Series 13 – Why we maintain Cash and stayed prudent in deployment

In our previous episode, we highlighted to you why comparing benchmark with our portfolio over shorter time would not make a reasonable statement and also focussed on the constituents of benchmark versus our portfolio. This week we would like to tell you why did we maintain Cash and stayed prudent in deployment.

As an investor, it’s natural to want to see our portfolio grow and generate a healthy IRR. However, it’s important to remember that investing involves risks and uncertainties, and it’s not always wise to jump in headfirst.  Firstly what is timing the market- Timing the market involves having a view on the direction of the market and making investment decisions based on that view. Specifically, it means that the investor expects the market to fall, and they may make investment decisions such as selling stocks or holding cash in anticipation of the market decline. Each portfolio we build comes with a predetermined expectation on the IRR, based on the selected companies for investment. Therefore, it is essential to construct a portfolio in such a way that its IRR aligns with our expectations. This involves investing in companies with solid fundamentals that are undervalued, rather than following a predetermined model portfolio.

No Model Portfolio – At ITUS, we do not maintain a model portfolio and are willing to keep cash reserves when we are unable to identify businesses with appropriate valuations. Therefore, we exercise caution when investing capital and constructing each of our client’s portfolio, allowing us to seize opportunities as they emerge. As a result, we hold cash and carefully consider how to allocate it to maximize returns.

In future episodes, we will continue our discussion on our frameworks and strategies for constructing portfolios. For now, we hope you have a wonderful weekend.

These weekly contents are now available in our website for your ready and you may access the same in the below link –

Weekly Enlightenment Archives – ITUS Capital

As a part of our ongoing commitment to keeping you informed, we remain dedicated to our SIP program, providing investors with a convenient avenue to regularly enhance their portfolios. We encourage you to explore the benefits of this program for your clients. If you require more details, please don’t hesitate to reach out to your dedicated relationship manager at [email protected].