Quality Stock Selection: Unlocking Investment Success Of NJ Asset Management

Discover the innovative approach of NJ Asset Management’s CEO in selecting quality stocks, debunking myths, and emphasizing fundamentals over sectoral biases for long-term investment success.

Unveiling Factor-Based Investment Strategy

Rajiv Shastri, the Director and CEO at NJ Asset Management, shared insights into their distinctive approach towards investments. Shastri emphasized their methodology, known as factor-based investment, which relies on identifying desirable characteristics in stocks through past data analysis. These characteristics include quality, value, momentum, and low volatility.

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Understanding Factor-Based Investment

Factor-based investment, also known as quantitative or rule-based investment, focuses on identifying and investing in stocks exhibiting specific traits rather than traditional sector allocation. Shastri elaborated on their approach, which aims to capitalize on the performance of these identified characteristics rather than specific sectors or market capitalization.

Quality Stock Selection: NJ Asset Management

Debunking Myths on Quality Stocks

Contrary to popular belief, Shastri debunked the myth that high-quality stocks are limited to large-cap companies. He highlighted their findings, indicating a reasonable mix of high-quality mid-cap and small-cap stocks. This challenges the notion that quality is inherently correlated with market capitalization.

Dynamic Portfolio Allocation

NJ Asset Management’s portfolio allocation isn’t dictated by sector or market cap biases but is solely driven by the identified factors. Shastri emphasized their commitment to selecting stocks based on these factors rather than imposing sector-based or capitalization-based restrictions, ensuring a dynamic and unbiased approach to portfolio construction.

Evaluating Sector Performance

When asked about sector performance, Shastri reiterated their focus on individual stock characteristics rather than sectoral trends. He emphasized that their strategy involves applying rules to a wide universe of stocks, with minimal overlap with benchmark indices, thereby prioritizing stock fundamentals over sectoral performance.

Fundamentals-Driven Stock Selection

NJ Asset Management’s stock selection process primarily revolves around fundamental factors such as profitability, consistency, and debt levels. Shastri explained that their definition of quality focuses on companies exhibiting consistent profitability, low debt, and shareholder value distribution, with dividend yield serving as a supplementary factor.

Long-Term Investment Horizon

While portfolio rebalancing occurs annually, Shastri noted that the average holding period for individual stocks ranges from three to four years. This underscores their commitment to long-term value creation and stability, prioritizing the quality and consistency of investments over short-term market fluctuations.

Empowering Investors with Philosophy

Shastri emphasized the importance of investors understanding the underlying philosophy of their investment approach. By prioritizing high-quality stocks and maintaining a long-term perspective, NJ Asset Management aims to provide investors with consistent returns while mitigating short-term market volatility.


In conclusion, NJ Asset Management‘s factor-based investment strategy offers a unique approach to stock selection, prioritizing fundamental characteristics over sectoral biases. By focusing on quality, value, momentum, and low volatility, they aim to deliver consistent returns and empower investors with a deeper understanding of their investment philosophy.

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