NEPSE trading

#DiversifiedPortfolio #Fundame
·

By Sandeep Chaudhary

How to Build a Diversified Portfolio Based on Company Fundamentals

How to Build a Diversified Portfolio Based on Company Fundamentals

Building a diversified investment portfolio using fundamental analysis is one of the smartest ways to manage risk while maximizing long-term returns in the Nepal Stock Exchange (NEPSE). A diversified portfolio spreads investments across different companies, sectors, and asset types, ensuring that poor performance in one area does not severely impact overall wealth. When combined with fundamental evaluation, diversification becomes a scientific process — not just a random mix of stocks, but a balanced selection of fundamentally strong companies.

To begin, investors should focus on company fundamentals, analyzing financial statements, profitability, management quality, and market position. Metrics such as Earnings Per Share (EPS), Price-to-Earnings (P/E) ratio, Book Value, Return on Equity (ROE), and Debt-to-Equity Ratio (D/E) provide insight into a company’s financial strength. Companies with strong cash flow, low debt, and consistent revenue growth serve as reliable building blocks for a diversified portfolio.

A well-diversified portfolio in Nepal typically includes exposure to key sectors like commercial banking, hydropower, insurance, manufacturing, and mutual funds. For example:

  • Banks provide stable dividends and steady growth.

  • Hydropower companies offer long-term value through government-backed power purchase agreements (PPAs).

  • Insurance firms balance risk with consistent premium income.

  • Manufacturing and trading sectors add growth potential.

  • Mutual funds and debentures provide liquidity and fixed returns.

The goal is to combine growth, stability, and income assets to create balance. Investors should also consider economic cycles — when one sector slows, another often rises. By analyzing fundamentals, one can identify which sectors are likely to outperform during certain market conditions.

Rebalancing the portfolio every few months or annually is essential to maintain proper asset allocation. This means trimming positions that have grown too large and adding to undervalued but fundamentally sound companies. Patience, discipline, and research are vital in keeping the portfolio healthy.

According to Sandeep Kumar Chaudhary, Nepal’s leading Technical and Fundamental Analyst and founder of the NepseTrading Training Institute, “Diversification is not about owning too many stocks — it’s about owning the right ones. A truly diversified portfolio is built on the foundation of strong fundamentals and clear strategy.” With 15+ years of banking and market experience and having trained 10,000+ investors, he teaches that diversification guided by fundamentals ensures long-term stability, consistent growth, and peace of mind.

Related Blogs

Social Security Fund Accumulates Over Rs 102 Billion as Contributor Base Expands
Top

3 min read

Social Security Fund Accumulates Over Rs 102 Billion as Contributor Base Expands

Social Security Fund Accumulates Over Rs 102 Billion as Contributor Base Expands Nepal’s Social Security Fund (SSF) has crossed a significant financial milestone, with total contributions exceeding Rs 102 billion. As of Falgun 10, the fund has accumulated Rs 102.54 billion, reflecting steady growth since its operational launch. The figures signal both expanding participation and the gradual institutionalization of Nepal’s contributory social protection system. The social security schemes were formally introduced on Mangsir 11, 2075 BS, while contribution collection began from Shrawan 1, 2076 BS. Since then, the fund has gradually expanded its coverage across different categories of workers, marking a structural shift in how social protection is financed in Nepal.

Dipesh Ghimire

·

24 Feb, 2026

Nepal Moves to Dismantle Informal Brokerage System in Real Estate Sector
Top

3 min read

Nepal Moves to Dismantle Informal Brokerage System in Real Estate Sector

Nepal Moves to Dismantle Informal Brokerage System in Real Estate Sector Department of Land Management and Archives has announced a major reform in Nepal’s real estate sector, aiming to end the long-standing dominance of informal brokers and middlemen. The department has decided to shift high-value property transactions in metropolitan and sub-metropolitan areas to a fully company-based system, marking one of the most significant regulatory changes in decades. Under the new policy, only licensed real estate companies will be allowed to facilitate property transactions in major urban centers. The department has so far authorized 36 companies to operate under this framework. According to Director Hari Prasad Pant, the system will become mandatory from Falgun 25, making company-based transactions a legal requirement rather than an option.

Dipesh Ghimire

·

24 Feb, 2026

Dual ISIN System Proposed to Protect Public Investors from Misleading Share Sales
Top

3 min read

Dual ISIN System Proposed to Protect Public Investors from Misleading Share Sales

Dual ISIN System Proposed to Protect Public Investors from Misleading Share Sales CDS and Clearing Limited has announced plans to introduce a dual International Securities Identification Number (ISIN) system to prevent the misleading sale of promoter shares to general investors. The company said the proposed mechanism aims to strengthen transparency and ensure greater legal and financial protection for market participants. The provision has been included in the proposed Dematerialization Operation Directive, 2082, which has already been submitted to the Securities Board of Nepal for approval. Under the new framework, separate ISIN codes will be assigned to promoter shares and public shares, making it easier to distinguish between the two categories in the secondary market.

Dipesh Ghimire

·

24 Feb, 2026

Energy Promises Return to Center Stage as Parties Revive Ambitious Election Agendas
Top

4 min read

Energy Promises Return to Center Stage as Parties Revive Ambitious Election Agendas

Energy Promises Return to Center Stage as Parties Revive Ambitious Election Agendas As Nepal once again moves toward elections, energy has re-emerged as a central theme in political manifestos. Major parties are presenting electricity as the “key to prosperity,” raising targets for megawatt production, promoting export visions, and linking hydropower with green hydrogen and digital transformation. The numbers look impressive on paper, but for many voters, a fundamental question remains unanswered: how many of the past promises were actually fulfilled. During previous elections, similar commitments were made with equal enthusiasm. Parties pledged rapid expansion of generation capacity, higher per capita consumption, and improved export infrastructure. Yet, years later, critical problems related to power purchase agreements (PPAs), transmission bottlenecks, and regulatory uncertainty continue to limit the sector’s growth. Despite soaring targets, structural challenges remain largely unresolved.

Dipesh Ghimire

·

24 Feb, 2026

Federation of Nepalese Chambers of Commerce and Industry Leadership Race Intensifies as Hemraj Dhakal Announces Senior Vice President Candidacy
Top

2 min read

Federation of Nepalese Chambers of Commerce and Industry Leadership Race Intensifies as Hemraj Dhakal Announces Senior Vice President Candidacy

Federation of Nepalese Chambers of Commerce and Industry Leadership Race Intensifies as Hemraj Dhakal Announces Senior Vice President Candidacy The election race within the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has formally entered a new phase after Hemraj Dhakal announced his candidacy for the post of Senior Vice President. Targeting the federation’s 60th Annual General Meeting scheduled for Chaitra 28 and 29, Dhakal unveiled his panel in Kathmandu on Monday, outlining an agenda centered on economic productivity and private sector confidence. Currently serving as Vice President under the commodity category, Dhakal positioned his campaign around the idea of transforming Nepal’s economy from consumption-driven to production-oriented. He stressed that employment generation within the country must be prioritized to curb youth migration abroad. According to him, strengthening manufacturing and value-added industries is not merely an economic necessity but a national responsibility.

Dipesh Ghimire

·

24 Feb, 2026

Mid-Term Monetary Policy Review Set to Test Nepal’s Economic Revival Efforts
Top

3 min read

Mid-Term Monetary Policy Review Set to Test Nepal’s Economic Revival Efforts

Mid-Term Monetary Policy Review Set to Test Nepal’s Economic Revival Efforts Nepal Rastra Bank is preparing to release the mid-term review of its monetary policy for the fiscal year 2025/26 (2082/83) this Tuesday, in line with the Monetary Policy Formulation Procedure, 2016. The regulation requires the central bank to publish quarterly and half-yearly reviews within 45 days of the end of each review period. With the deadline approaching, expectations are growing in the financial sector regarding possible policy adjustments.

Dipesh Ghimire

·

24 Feb, 2026

Major Political Parties Prioritize Climate Change in Election Manifestos
Top

4 min read

Major Political Parties Prioritize Climate Change in Election Manifestos

Major Political Parties Prioritize Climate Change in Election Manifestos As Nepal approaches the House of Representatives election on Falgun 21, major political parties have given strong priority to climate change in their election manifestos. Rising environmental risks, frequent natural disasters, and growing pressure on livelihoods have made climate issues a central political concern. Although Nepal contributes very little to global carbon emissions, its geographical location and fragile mountain ecosystem have made it one of the most vulnerable countries to climate impacts. As a result, political parties have begun treating climate change as a national development challenge rather than only an environmental issue.

Dipesh Ghimire

·

23 Feb, 2026

Investor Confidence at Historic Low Ahead of Elections, Study Warns of Deepening Private Sector Crisis
Top

5 min read

Investor Confidence at Historic Low Ahead of Elections, Study Warns of Deepening Private Sector Crisis

Investor Confidence at Historic Low Ahead of Elections, Study Warns of Deepening Private Sector Crisis A recent study published by the online news portal Clickmandu, titled “Investor Confidence and Business Environment after the Gen Z Uprising, 2082,” As Nepal prepares for the House of Representatives election scheduled for Falgun 21, most major political parties have already unveiled their election manifestos, promising policy reforms to strengthen the private sector and revive economic growth. The manifestos emphasize keeping tax rates stable, promoting domestic production, encouraging entrepreneurship, reducing monopolies, improving regulations, and creating a fear-free business environment. Political leaders have repeatedly described the private sector as the “engine of the economy” and pledged to restore business confidence through supportive policies.

Dipesh Ghimire

·

23 Feb, 2026

Excess Liquidity Piles Up as Banks Show Reluctance to Expand Credit Despite NRB’s Easing Measures
Top

3 min read

Excess Liquidity Piles Up as Banks Show Reluctance to Expand Credit Despite NRB’s Easing Measures

Excess Liquidity Piles Up as Banks Show Reluctance to Expand Credit Despite NRB’s Easing Measures Kathmandu — Despite Nepal Rastra Bank (NRB) adopting an expansionary monetary policy stance in the current fiscal year aimed at boosting credit growth, commercial banks remain hesitant to significantly expand lending. Instead of aggressively pushing loans into the economy, banks are increasingly competing to park their surplus funds in short-term liquidity absorption instruments issued by the central bank. This behavior clearly signals a deeper lack of confidence in credit expansion prospects, even after regulatory easing measures. The data reveals a striking liquidity imbalance within the banking system. Although deposits have continued to grow steadily, credit demand has not kept pace. As a result, more than NPR 838 billion (8.38 trillion rupees) has accumulated at Nepal Rastra Bank in various forms, including deposit collection instruments, standing deposit facilities, and central bank bonds. This reflects the inability—or unwillingness—of banks to deploy funds into productive sectors of the economy.

Dipesh Ghimire

·

23 Feb, 2026

ABC Securities Investor Pro Meet 2082 Concludes Successfully in Birgunj
Top

3 min read

ABC Securities Investor Pro Meet 2082 Concludes Successfully in Birgunj

ABC Securities Investor Pro Meet 2082 Concludes Successfully in Birgunj The ABC Securities Investor Pro Meet 2082, organized under the financial literacy campaign of ABC Securities, was successfully held in Birgunj with strong participation from investors, market experts, and business leaders. The one-day program included share market training, panel discussions, and interactive sessions aimed at improving investors’ understanding of Nepal’s capital market. According to the organizers, the main objective of the event was to strengthen investors’ knowledge, skills, and confidence so that they can make informed and responsible investment decisions. The program reflected the growing demand for structured and practical market education among Nepalese investors. In recent years, participation in the stock market has increased rapidly, especially among young and first-time investors. However, many of them still lack proper understanding of market risks, technical analysis, and long-term investment planning. By organizing such events, ABC Securities is attempting to bridge this knowledge gap and promote disciplined investment behavior. The ABC Securities Investor Pro Meet 2082, organized under the financial literacy campaign of ABC Securities, was successfully held in Birgunj with strong participation from investors, market experts, and business leaders. The one-day program included share market training, panel discussions, and interactive sessions aimed at improving investors’ understanding of Nepal’s capital market. According to the organizers, the main objective of the event was to strengthen investors’ knowledge, skills, and confidence so that they can make informed and responsible investment decisions. The program reflected the growing demand for structured and practical market education among Nepalese investors. In recent years, participation in the stock market has increased rapidly, especially among young and first-time investors. However, many of them still lack proper understanding of market risks, technical analysis, and long-term investment planning. By organizing such events, ABC Securities is attempting to bridge this knowledge gap and promote disciplined investment behavior.

Dipesh Ghimire

·

23 Feb, 2026