Dear Investor,
In my years of working closely with investors through changing market cycles, I have noticed a persistent pattern: when markets move sideways, our natural impulse is to go hunting for new stocks. Yet, the most powerful driver of long-term compounding isn’t finding the next shiny opportunity—it is managing what you already own with discipline.
In this month’s Spotlight, we explore practical ways to extract more value from your existing stock portfolio. Read on to explore the truth revealed in the Dalbar Study—how, over a 30-year horizon, subtle underperformance can result in a staggering ₹11.5 crore erosion in potential wealth. It underscores an insight I hold close: long-term success is less about stock picking and far more about behavioural discipline, which is where structured frameworks like Portfolio Management Services (PMS) add true value.
Complementing this, our Knowledge Bulb explores The Designer Suit Trap, highlighting how the “Endowment Effect” often tricks investors into holding decaying legacy stocks out of pure psychological attachment rather than fundamental strength.
On the home front, we hosted another insightful SSW Navigator webinar featuring Mr. Hitesh Arora (Fund Manager, Abakkus Investment Managers Pvt. Ltd.), who shared valuable perspectives on Portfolio Management Services (PMS) and how investors can gain more from their stock portfolios.
We also extend a warm welcome to Ms. Sweta Agarwal, who joins my team as Executive Assistant to strengthen our executive governance.
Lastly, our Personal Finance Corner breaks down the major NPS and EPS reforms, which introduce game-changing liquidity and flexibility for retirement planning.
Happy reading!
Warm regards,
Sandeep Chhajer Founder & CEO, SubhShanti Wealth
How to Get More from Your Existing Stock Portfolio:
Why Professional Portfolio Management Deserves a Place
Most investors believe that improving returns means investing more money or finding the next multibagger. In reality, sustainable wealth creation often comes from managing your existing portfolio better rather than constantly adding new investments.
Before allocating fresh capital, ask yourself a simple question: Is my current portfolio positioned to deliver its full potential?
Here are a few practical ways to maximize returns from the investments you already own.
Revisit Your Investment Thesis
Every stock in your portfolio was purchased for a reason. But businesses evolve, industries change, and management quality can improve or deteriorate over time.
Review whether the original reasons for owning each company still hold true. If the company’s earnings trajectory, competitive advantage, capital allocation, or industry outlook has weakened, it may be time to replace it with a stronger opportunity instead of holding on out of hope.
Successful investing isn’t about being right forever — it’s about being willing to change your mind when facts change.
Don’t Mistake Quantity for Diversification
Many investors own 50, 60, or even 70 stocks believing they’re reducing risk. In reality, excessive diversification often dilutes returns and makes meaningful wealth creation difficult.
A well-constructed portfolio focuses on a carefully selected group of high-quality businesses while maintaining adequate diversification across sectors and themes. The objective isn’t to own every good company — it’s to own enough great companies with conviction.
Let Winners Compound
One of the biggest mistakes investors make is selling quality businesses too early after earning quick gains.
Exceptional companies often create the majority of long-term portfolio returns through the power of compounding. Rather than exiting successful investments prematurely, consider trimming positions only when they become disproportionately large or no longer fit your desired asset allocation.
Why Portfolio Management Services (PMS) Can Make a Difference
While these principles sound straightforward, consistently applying them through different market cycles is often challenging.
This is where a professionally managed Portfolio Management Service (PMS) can add significant value.
A good PMS isn’t simply about selecting stocks. Its real value lies in continuously managing the portfolio through disciplined research, structured decision-making, and risk management.
Professional portfolio managers regularly review investment theses, identify changing business fundamentals, rebalance portfolios when necessary, manage concentration risk, and allocate capital objectively. Most importantly, they help remove emotions from investment decisions — one of the biggest obstacles to long-term investing success.
For investors who lack the time, expertise, or discipline to actively monitor their portfolios, PMS offers access to a structured investment process backed by dedicated research and professional oversight.
Rather than replacing an investor’s own investments, PMS can serve as an important component of an overall portfolio by complementing existing holdings with professional management and a long-term investment approach.
The Dalbar Study: Why Behaviour Matters More Than Stock Picking
One of the strongest arguments for professional portfolio management comes from investor behaviour itself.
According to studies conducted by Dalbar, USA, the average investor has consistently underperformed market benchmarks across 5-year, 10-year, 20-year, and even 30-year periods by an average of 5%. The gap has remained significant despite investors having access to more information and investment opportunities than ever before.
The reason isn’t necessarily poor stock selection.
The biggest contributor to underperformance is behaviour — panic selling during market corrections, chasing recent winners, reacting to headlines, excessive trading, and allowing emotions to influence investment decisions.
A mere 5% underperformance can lead to a substantial notional loss which compounds over time.
| Year | Invested Amount | *Individual PF Returns | If Invested in Benchmark | **Investor Return (p.a.) | Benchmark Return (p.a.) |
|---|---|---|---|---|---|
| 5 | 30 lac | 36.01 lac | 41.24 lac | 7% | 12% |
| 10 | 60 lac | 87 lac | 1.16 cr | ||
| 20 | 1.20 cr | 2.62 cr | 5.00 cr | ||
| 25 | 1.5 cr | 4.07 cr | 9.50 cr | ||
| 30 | 1.74 cr | 6.14 cr | 17.65 cr |
The analysis assumes a monthly SIP of ₹50,000, with benchmark returns of 12% p.a. and investor returns of 7% p.a., reflecting a 5% long-term underperformance. It is intended to illustrate the potential notional wealth erosion caused by consistently trailing the benchmark.
*Individual PF Returns refer to Individual Portfolio Returns. **The illustration assumes a 5% difference in annual returns for simplicity and educational purposes. Actual differences in portfolio returns over a 30-year period may vary and have historically ranged between 1% and 7%.
A 5% underperformance against the benchmark on a ₹50,000 monthly SIP over a 30-year period can be equal to approximately ₹11.5 crore. Yes, you read that right — ₹11.5 crore.
This reinforces an important investing principle:
Successful investing is often less about picking the perfect stock and more about managing emotions with discipline and consistency.
A professionally managed PMS introduces a structured investment framework that helps reduce emotional decision-making. Investment decisions are driven by research, valuation, portfolio construction, and long-term objectives rather than short-term market sentiment.
While no investment strategy or portfolio manager can guarantee superior returns, a disciplined and process-driven approach can help investors avoid many of the behavioural mistakes that have historically reduced long-term wealth creation.
The Bottom Line
Creating wealth is not just about finding great businesses — it’s about managing them wisely over time.
Review your portfolio periodically, stay focused on quality, avoid unnecessary diversification, and allow compounding to work in your favour.
For many investors, adding a professionally managed Portfolio Management Service can be a valuable way to strengthen their overall portfolio. Beyond stock selection, PMS brings research, discipline, ongoing monitoring, risk management, and emotional objectivity — qualities that are often difficult to maintain consistently as an individual investor.
The best portfolios are rarely built through constant activity. They are built through thoughtful decisions, disciplined execution, and the patience to stay invested for the long term.
Managing wealth is about more than selecting investments. If you’d like to understand whether this approach fits your broader financial goals, connect with a SubhShanti Wealth expert to explore your options.
Mutual fund and Portfolio Management Services (PMS) investments are subject to market risks. Please read all scheme related documents carefully before investing. Past performance is not indicative of future results. This article is intended for educational purposes only and does not constitute investment advice. Investors are encouraged to consult their financial advisor before making any investment decision.
Webinar Highlights: “How to Gain More from Your Stock Portfolio”
As part of our SSW Navigator investor education initiative, SubhShanti Wealth recently hosted an insightful conversation on “How to Gain More from Your Stock Portfolio.“
The session featured Mr. Sandeep Chhajer, Founder & CEO of SubhShanti Wealth Pvt. Ltd., in conversation with Mr. Hitesh Arora, Fund Manager at Abakkus Investment Managers Pvt. Ltd. Together, they explored what truly separates successful long-term investors from the rest — not stock tips, but a disciplined investment process.
Key Takeaways from the Session:
- Investing is more than stock picking: Building wealth isn’t just about finding the next winning stock. Success comes from managing your portfolio with discipline through changing market conditions.
- You don’t have to be right every time: One of the session’s most memorable insights was: “In investing, your mistakes simply need to be fewer than your successes.” Long-term wealth is created by allowing winners to compound while keeping losses under control.
- Focus on quality, not market noise: Professional investors look beyond headlines. They evaluate the strength of a business, the quality of its management, valuation, and long-term growth potential before making investment decisions.
- Risk management is the real differentiator: Most investors focus on how much they can gain. Professional investors focus equally on how much they can lose. A portfolio that falls 50% needs a 100% recovery just to break even. Avoiding large drawdowns is often more powerful than chasing high returns.
Want to stay ahead? Join the SSW Navigator Community today for priority invitations to our upcoming webinars and expert sessions!
Click here to join SSW Navigator CommunityA Warm Welcome to Our Newest Team Member
We are delighted to welcome Ms. Sweta Agarwal to our Kolkata office as Executive Assistant to Founder & CEO, Sandeep Chhajer.
Ms. Sweta Agarwal
EA to Founder & CEO
With over 11 years of corporate experience in executive support and operations, she will strengthen leadership efficiency and drive key growth initiatives.
Welcome aboard, Ms. Sweta!
The Designer Suit Trap:
The Psychology of Endowment Bias & Loss Aversion
Imagine keeping a premium designer suit bought a decade ago. It is completely out of style, no longer fits your current frame, yet it occupies prime real estate in your closet simply because of the high price tag you originally paid for it.
In behavioural finance, this exact psychological trap is known as the Endowment Effect, heavily amplified by price anchoring and the pain of loss aversion. Retail investors frequently fall in love with individual stock tickers simply because they acquired them years ago. Even when the underlying corporate fundamentals decay, market dynamics shift, or competitive moats disappear, they stubbornly refuse to exit.
This happens because nobody likes taking a loss or admitting a mistake. We end up treating old stocks like sentimental family heirlooms, forgetting they are simply tools built to grow our money.
Investor moral: A stock does not know, nor does it care, that you own it. Holding onto past winners out of pure sentiment or historical nostalgia can carry a significant opportunity cost. True portfolio optimization requires cold, objective, and regular mathematical re-evaluation.
EPS & NPS Get a Makeover – What the New Rules Mean for Your Retirement
Retirement planning has become more flexible than ever, thanks to the recent reforms in the Employees’ Pension Scheme (EPS) and the National Pension System (NPS). These changes are aimed at giving subscribers greater control over their retirement corpus while making the overall pension framework more efficient and investor-friendly.
The biggest reform is in the National Pension System (NPS). Earlier, most subscribers could withdraw only 60% of their retirement corpus as a lump sum, while the remaining 40% had to be used to purchase an annuity that generated a monthly pension. Under the revised regulations, eligible non-government subscribers with a corpus exceeding ₹12 lakh can now withdraw up to 80% of their accumulated savings as a lump sum, with only 20% required to be invested in an annuity. This significantly improves liquidity at retirement, allowing individuals to meet large financial commitments such as medical expenses, children’s education, home renovation, or debt repayment without compromising their long-term retirement income. Subscribers with a corpus of ₹8 lakh or less can now withdraw the entire amount without purchasing an annuity, while those with a corpus between ₹8 lakh and ₹12 lakh also enjoy more flexible withdrawal options.
Another noteworthy addition is the Systematic Lump Sum Withdrawal (SLW/SUR) facility. Instead of withdrawing the entire lump sum at one time, retirees can choose to receive their money in periodic instalments, helping them manage cash flows more effectively while allowing the remaining corpus to continue participating in market growth. The maximum age for remaining invested under NPS has also been increased to 85 years, giving subscribers additional time to build wealth if they choose to postpone retirement or continue earning. These reforms make NPS far more adaptable to today’s evolving retirement needs.
On the EPS front, recent operational reforms focus on improving service delivery rather than changing pension benefits. The Employees’ Provident Fund Organisation (EPFO) has introduced defined timelines for pension claim settlements, reducing delays in processing applications. Eligible pensioners are also entitled to interest if claims are not settled within the prescribed period, bringing greater accountability and transparency to the system. In addition, the implementation process for the higher pension option has been streamlined, making it easier for eligible members to exercise their choice while continuing to receive existing benefits such as family and disability pensions.
The message is clear – retirement planning is no longer just about accumulating a pension corpus. The latest EPS and NPS reforms empower subscribers with greater flexibility, improved liquidity, and a smoother retirement experience. By understanding these changes and aligning them with your financial goals, you can make more informed decisions and enjoy greater confidence as you plan for life after retirement.
Riddle of the Month
“I am the mathematical expression of an investment portfolio’s performance relative to a benchmark index. While one Greek metric measures your exposure to broader market volatility, I represent the true, pure outperformance that professional, active management adds to your net worth. What am I?”
Previous Edition Answer Reveal
“Cricket has it, football has it, and so does your financial year. I’m the moment to check the score before the second half begins. What am I?”
✓ Answer: B — Mid-Year Review
Just like a mid-game tactical assessment, a mid-year financial review gives you the opportunity to pause, audit portfolio performance against your goals, and make course corrections before the second half of the financial year unfolds.
