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  • Shobhit Khare

Two years since launch - a staggering 60% return. Is our portfolio a hit already? Check your TRP now

Inertia portfolio completed two years in August 2014. It has been a schizophrenic two year period with the markets testing the investor patience in the first year but rewarding handsomely in the second year. Inertia portfolio has performed well and is up 60% in the last two years as compared to 51-52% returns for Sensex/Nifty. Last one year was particularly rewarding with portfolio up 53% vs 43-45% for Sensex/Nifty. Over the two year period inertia portfolio has compounded your money at 26% CAGR as compared to 23% CAGR for Sensex/Nifty. We are doing much better as compared to our long-term goals – 15-20% CAGR on absolute basis and outperforming the Sensex on relative basis. All in all, we are doing fine as far as the annual portfolio returns are concerned (let us call it ‘R’) and frankly, that is all that is in our (Team Inertia’s) control! Here, we would like to introduce two more variables (‘R’ being the first) – Principal (‘P’) and Time (T) that have a similar far reaching impact on your overall wealth creation. Its time to remind you of the compound interest formula (variables modified to suit the context here) we all by-hearted in grade 7th/8th but forgot it all blissfully ever since. The understanding of this magic formula is all you need to create wealth for yourself: W = P * (1 + R%) ^ T W = Investor Wealth (final portfolio value) P= Principle (amount invested in the portfolio) R = Annual Portfolio Returns T = Time invested (in years)

Introducing the Inertia ‘TRP’ framework: At Inertia, we are committed and confident of delivering sustained ‘R’ to your magic wealth equation. The portfolio outperformance has been achieved not by ‘chasing’ latest market fads or ‘hot stocks’ (as you know, Inertia is

opposite of ‘momentum’) but by sticking to the fundamental principles which call for patience and deep understanding of the investment process. Just as strong always beat the weak, the companies with solid fundamentals always outscore the others, driving outperformance for a portfolio like Inertia. We urge you to provide us with a long rope with the other two variables – T and P – by investing more into Inertia Portfolio and making a long-term commitment to the same. Together, lets make the magic work for you and make your portfolio super duper hit as we gain the ‘TRPs’!

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