Review Your Portfolio From Time-To-Time

Every individual has to do investments to meet his goals in future. He must be careful in understanding the pros and cons of the investment vehicle and its risks associated with it before taking a final call to invest. One must plan his investments as per the life stages, goal period etc.

Generally Goals are of 3 Types-

  • Short Term goals- To be achieved within 1-3 years
  • Medium Term goals- To be achieved within 3-5 years
  • Long Term goals- Which are to be achieved after 5-10 years

The investor must be able to identify the right product to the right goal. After selection of the right investment avenue, the investor must periodically review his portfolio and modify the changes as per his life stages and income growth levels.

If the investor has the ability to review his portfolio and make changes; he can do so. But if he is unable to review his portfolio frequently due to his work tensions, he should select a good financial advisor;who would take care of his finances in tough times. But it is recommended to spare some hours once in 6 months to review your portfolio on your own. If there is no time left with you, then only consult a good financial advisor. He will guide you in turbulent times.

Reviewing portfolio once in a 6 months gives an overview on the performing assets over under performing assets. Do remember investments take its own time to reap the fruits. By having an idea on under performing assets, don’t take action immediately. But Do observe the reason for under performance, its Longevity and project the future growth; whether it would rebound or continue as laggard in the future too.

If you think that the asset would rebound in the future; ignore short term under performance and stay invested for the long term. But if you think the asset would be laggard in the coming future; come-out of that investment and invest in better performing asset. Here “asset re-balancing” plays a key role in your returns. That skill of asset re-balancing is not possible for every one! If you need help in portfolio re-balancing. consult a trusted advisor and he will do the task on your behalf!

Reviewing portfolio once in a 6 months would master the skill of analysing the investments on yourself and by reviewing periodically you would sooner become an expert and take decisions on your own based on your past experience! So keep an eye on your investments once in a 6 months.

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