Managing Portfolio: From Selection of Securities to Selection of Assets with Some New Thoughts from Indian Perspective and Ethos
(An article motivated through learning at Banasthali University, writings of Prof. Subhash Sharma, Dean, Indus Business Academy, Bengaluru & Greater Noida and classroom session of Dr. Harsh Purohit, Associate Professor and
Chair-ICICI Bank BFSI)

Ms. Kanupriya Khandelwal
Ms. Ashwini Joshi
MBA III Sem (Finance)
Banasthali University (Raj.)
Category A University (MHRD, GoI)
Ranked 6th nationwide on factual data (AC Nielsen-India Today, August 15, 2011)
NAAC A Grade (2003)


Portfolio has been widely defined as a basket of investments owned by the individual or organization. These investments often include shares, which are investments in individual businesses, bonds or other forms of debt, mutual funds which are essentially pools of money collected from many investors etc..


The art and science of making decisions about investment mix and policy, matching investment to objectives asset allocation for individuals and institution, and balancing risk agent is called portfolio management. It is all about the strengths, weakness, opportunities and threats in the choice of debt, equity, domestic, international, growth, safety etc., and it manages the return and risk. (

Selection of the securities is one of the aspects of portfolio management; Selection of securities is the process by which one chooses the securities, derivatives and other assets. The modern textbooks on investment management point out that selection securities is the integral part of portfolio management, however as evident by news in major finance dailies and RBI bulletin, today's investor has shown huge interest in going for real assets on well .Therefore the need of the hour in to rename selecting securities as selection of assets. The variety for investors has been huge, for example:

* Market twists & turns are difficult to predict: FMP (Fixed Maturity Plans) have emerged as a possible investment avenue for HNIs. Risky debt instruments are gaining ground. Telecom, Real estate have lost their sheen. Diversification can be the key. Preferable options among HNIs based on market movement are cash, fixed income, equity, real estate, alternate investments. Furthermore, Gold still is termed as safest bet. Real estate is lacking infusion but some gain can be expected. Investing in art is a matter of choice & acumen. Below 1% is the share of overseas investment in HNIs assets, but can reach up to 20%. Herd mentality prevails in choice of avenues. Time frame is also a constrain. So proves tedious task for wealth managers. Emotions strongly play their role as the tug of war between wealth management plan & asset allocation plan continues. (Business Line ,August 10, 2011)

* Manappuram finance floated its NCD issue to raise 400 crore with the shortest lock in period 400 days. It has kept GREENSHOE option of Rs 350 crore. As the company deals with loans of one year maturity period, so it's a viable option to raise short term funds. The company intends to raise 6000cr in FY12; sources may consist of bank loans, commercial papers, bond issues. It announced 12% return for 400 days. Rates of 12.56% & 12.34% were offered to retail & financial investors respectively for two years period.(Business line, August12, 2011)

Lets us look at the broad guidelines/approaches for selecting an asset:-


  • Fundamental Analysis
  • Technical Analysis
  • Learning from Efficient Market Hypothesis (EMH)
  • Learning from Behavioral Finance
  • Ecletic  Approach
  • Holistic Decision making {Conceptualized  by Dr. Harsh Purohit at Banasthali Vidyapith in 2011 extending wisdom equation ( Wisdom = Reason + Intuition) and MBA model conceptualized by Prof. Subhash Sharm in 1996}

Fundamental Analysis:-EIC analysis helps to find out so that we can buy undervalued and sell overvalued stocks using EIC (Economy, Industry, Company) framework.

Technical Analysis :-Price and Volume data helps to apply graphical patterns to know right time to buy/sell/hold.

Learning from Efficient Market Hypothesis (EMH):-Respect the market and do not go too much against the wind.

Learning from Behavioral Finance:-Market may witness Bubble/Burst and take advantage based on irrational behavior of investors.

Ecletic Approach :-Combine all the above Fundamental Analysis, Technical Analysis, Learning from Efficient Market Hypothesis (EMH), learning from Behavioral Finance and take good decisions.

Holistic Decision Making Model (HDMM):-One should follow the Ecletic but should use Intuition in a positive way. The concept refutes Behavioral Finance concept which terms usage of intuition as irrational. Being selfless, focused, belief in Vasudev-Kutumbkum, Pranayam & Yog, open to new thoughts, learning from Indian ethos and faith in God can improve intuitive power with passage of time.

If we analyse all these guidelines it is evident that HDMM is more appealing for investing because it is ethical, logical and takes intuition in positive manner. {The Model is an extension of WISDOM equation (Reason + Intuition=WISDOM) and MBA model proposed by Prof. Subhash Sharma in 1996})


  • Returns
  • Safety
  • Liquidity
  • Credit rating etc.

When the return is moderate, Safety is good and Liquidity is high; in that time investor should be investing his/her money in debt. Credit rating is very important like for US the sovereign credit rating has been downgraded from AAA to AA+ and is showing impact. However giving a loan to someone in need at higher interest rate can also be an option but HDMM advocates against it as model focuses more on intuition (linked to heart, consciousness, and goodself)  which increases the chances that the investor shall follow ethical dimension. HDMM, Viswa model (Prof. Sharma has proposed this model and further clarified in his path breaking book; "New mantras in corporate corridors- from ancient roots to global roots" that the word 'viswa' stands for the world and interestingly can be decoded as 'videshi' + 'swadeshi'. To the delight of the authors of this article, the model says that 100% dependency and non-dependency are equally dangerous.)


  • Legal title
  • Past price behavior
  • Future development in the area
  • Government and Bank's financial support
  • Locality, Religious factors etc.

Again if we turn to HDMM for help, it advocates that one should do indepth analysis and look beyond what others can or common notions, for example it is right to trust the Government but not blindly and case of Noida real estate investors is a true example. Similarly concept of Shubh-Labh mentioned in our ancient texts indicates that one should not buy/sell property taking advantage of poor position (economic/information wise) of another person. Prof. Sharma (2007) has been the first to point this while discussing the concept, 'Force of self or Force of self spirituality'. One may further find meaningful insights on this by studying the Type I, II and III categories of Give/Take ratio (G/T) conceptualized by Prof. Subhash Sharma in 2007.

CONCLUSION:- It is better to use the term Selection of 'Assets' rather than 'Security'. Investors should be innovative, careful and follow Indian ethos and holistic model to evaluate assets.


1. Chandra Prasanna (2009): Investment Analysis and Portfolio Management, Tata McGraw, New Delhi

2. Sharma Subhash (2007), "New mantras in corporate corridors- from ancient roots to global roots", New Age International, New Delhi

3. Sharma Subhash (1996), "Management in new age: western windows eastern doors", New Age International, 2nd edition, New Delhi, 2006

4. Wikipedia online, accessed during July 2011

Ms. Kanupriya Khandelwal
Ms. Ashwini Joshi
MBA III Sem (Finance)
Banasthali University (Raj.)

Source: E-mail August 15, 2011




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