CONSTANT RUPEE PLAN

The objective of this plan is to balance

the division between the conservative
and aggressive components of the
portfolio in terms of the target value.
The target value could be fixed initially
by the investor in a desirable proportion.
For instance, a constant Rupee plan
could consider the initial value of Rs
10,000 each between conservative and
aggressive portfolios.
There can also be an initial value of Rs.
15,000 and Rs. 5,000 in the aggressive
 CONSTANT RUPEE PLAN
Subsequently, changes in the portfolio
components would cause a revision or
shift of funds from one component to the
other.
The target portfolio value in the
aggressive component could be fixed to
the initial value and the excess shifts to
the conservative portfolio.
Similarly, a shortfall in the aggressive
component is set right using the funds in
the conservative portfolio.
The purpose of this plan is to maintain
 CONSTANT RUPEE PLAN
Quarte Mkt No. of Value of Value of Total
r Price Share Share conservati (Rs.)
(Rs.) component ve
s componen
(Rs.) t (Rs.)
1 Year 1 100 100 10,000 10,000 20,000

2 85 100 8,500 10,000 18,500

3 80 125 10,000 8,000 18,000
Rs. 2000 shifted from conservative component to buy 25
shares
4 85 125 10,625 8,000 18,625
1 Year 2 95 125 11,875 8,000 19,875

2 97 104 10,088 10,037 20,125

Rs. 2,037 shifted to conservative component by selling 21
shares
 CONSTANT RATIO PLAN
In this plan, we maintain a ratio
between the aggressive and
conservative components of a portfolio.
The initial ratio is FIXED by the investor
and could be, say, 1:1 or any other
desirable ratio.
The fixed ratio is maintained until
portfolio reaches the target price level,
say, 20% rise or fall.
 CONSTANT RATIO PLAN
Mkt No. of Value of Value of Ratio of
Price Share Aggressive conservativ share to
(Rs.) components e conservati
(Rs.) component ve
(Rs.)
componen
t
100 100 10,000 10,000 1:1
85 100 8,500 10,000 0.85 : 1
80 113 9,040 8,960 1.01 : 1
Rs. 1,040 shifted from conservative component to buy 13
shares
85 113 9,605 8,960 1.07 : 1
95 113 10,735 8,960 1.20 : 1
97 103 9,991 9,930 1.01 : 1
10 shares are sold and invested into conservative
component to make ratio equal to 1:1 (appx)
 VARIABLE RATIO PLAN
This plan gives more flexibility to the
investors to revise the portfolio
components.
When share price falls, the investor may
shift major component of the conservative
and aggressive components
The desired ratio of investment holding
between aggressive and conservative
components of a portfolio, hence, may vary
according to the flexibility that an investor
wishes to incorporate in the portfolio
revision decision.
When the share price rises back, the
 VARIABLE RATIO PLAN
Mkt No. of Value of Value of Total Share as
Price Share Aggressiv conservati Portfoli a % of
(Rs.) e ve o Value portfolio
componen componen (Rs.)
ts t (Rs.)
(Rs.)
100 100 10,000 10,000 20,000 50.00
85 100 8,500 10,000 18,500 45.95
80 158 12,640 5,360 18,000 70.02
Rs. 4,640 shifted from conservative component to buy 58
shares
85 158 13,430 5,360 18,790 71.47
95 158 15,010 5,360 20,370 73.69
97 107 10,379 10,307 20,686 50.17
51 shares are sold and shifted Rs. 4,947 into conservative
component