scorecardresearchWarren Buffett's investment approach that Nilesh Shah of Kotak Mahindra

Warren Buffett's investment approach that Nilesh Shah of Kotak Mahindra AMC swears by

Updated: 24 Aug 2023, 12:53 PM IST

  • Nilesh Shah, the managing director of Kotak Mahindra AMC, revealed his long term, buy-and-hold investment strategy, which has largely built his personal wealth. Dominated by equities and real-estate, his portfolio gives a sound snapshot of a successful investment journey.

Warren Buffett

Warren Buffett

Adopting a 'buy and hold' investment strategy following the advice of renowned investor Warren Buffett, Nilesh Shah, the managing director at Kotak Mahindra Asset Management Company Ltd, has positioned equity as a dominant asset in his portfolio. Equity comprised of employee stock options or shares of Kotak Mahindra Bank constitutes 60% of Shah's wealth, demonstrating the extent of his firmly strapped relationship with his firm.

‘Long-term’ mindset dominates his investment approach

His association steeping into personal investments, Shah invests into his company's shares with a robust mindset of withholding the investment for at least a decade. Further, 15% of his wealth is parked in equity mutual funds, primarily spanning across large-and-mid cap sectors. However, Shah refrains from investing in passive funds, unless mandated by the market regulations, being a CEO at the asset management company.

While real estate constitutes another 15% of Shah’s wealth, he admits feeling jinxed with such investments. Regardless, he continues to invest in prospects near the outskirts of major cities, aiming for a steady rental income flow.

Shah's diversified portfolio reflects his investment wisdom

While a smaller allocation of his portfolio resides in debt (8%) and gold (2%), these assets serve specific goals. The debt allocation acts as his emergency corpus while the gold investments were made in consideration to provide for his children and he plans to increase the allocation to gold.

Shah continues to rely on his long-term investment plans to maintain his equity-heavy portfolio. "I don’t do active asset allocation due to the constraints of my job. I am a long-term investor by default," Shah noted. With his job as his primary income-generating channel, he acknowledges the goodwill he has earned amongst his investors.

For Shah, wealth is not just about monetary gain. It is about the broader perspective of life achievements, memories, and personal growth. Reflecting on past experiences with his wife, he appears satisfied with the journey made possible through their financial planning.

Drawing insights from Nilesh Shah's wealth-building journey, investors get a lifelike prototype of a diversified investment portfolio, prompting reconsiderations and retirements of their money habits, in the pursuit of sound financial well-being.

(Several parts of the text in this article were generated with the help of an AI tool.)

Warren Buffett says that investors should assess company's competitive advantage before investing into it.
First Published: 24 Aug 2023, 12:53 PM IST