Importance of Investment Portfolio
review
While
investing in any mutual fund scheme for any specific goal, we always assume
some rate of return from the investment. Actual rate of return vary time to
time from assume return, so it becomes very important to check whether we are
getting the calculated rate of return or not. Also should also check how
various asset class and schemes are performing in your portfolio. As per my
suggestion one should review their portfolio on periodic bases. Review your
portfolio once a year.
Reviewing your
portfolio don’t means frequent buying and selling based on performance. The
return we assume in our investment is for the Compound Annual Growth Rate (CAGR)
return. Always calculate your return on entire period of investment and need
not to be equal to assumed CAGR every year.
How to review your mutual fund schemes:
Every
investor can review the performance of their mutual fund scheme and compare it
with the performance of benchmark. You can also compare your scheme with peer
group performance. Performance of good scheme can also lag in some times, so don’t
give too much weight to short term performance while doing the review of the
portfolio. Rather than short term performance, always try to consider long term
return and consistency in performance.
Apart
from return you also need to compare your portfolio on other parameters like quality
of portfolio, risk and risk adjusted return while reviewing the investment scheme.
And if you feel that your scheme is not doing well and underperforms on all the
above parameters exit from that scheme and invest in some other scheme. But, always
remember reviewing portfolio doesn’t means buying and selling every time while
you review. Your decision of exiting from ongoing investment scheme should not
be based on short term underperformance noticed during review. Adapt holistic
approach of reviewing the scheme. Look and consider other important parameters
also rather short term return.
Once
you know where you are going and what you have to do by setting appropriate
investment objectives, your portfolio review will help you reach your
destination. You will definitely reach your investment goal by identifying
problems and mistakes that you can correct midcourse. Just like a Pilot your
job is to stay on course so that you can reach your destination safely and on
set time period.
We the best financial advisor in Lucknow is there to help you manage your wealth and make you aware of market risk .
**Note:- Mutual fund investments are subject to market risk. Please read Scheme related Document carefully before investing.
For mutual fund investment consult:-
Best financial advisor in Lucknow
best mutual fund advisor in Lucknow
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