As the name itself depicts itself, Portfolio Review is review of your portfolio.
Now first of all let’s understand that what a portfolio is.
Here portfolio means your investments in various mutual funds.
No matter how carefully you select/choose mutual fund but future performance is not guaranteed and it may change with time, market outlook and economy, behavior statistics of markets.
This continues change in market dynamics and performance of mutual fund, makes it mandatory to have a Portfolio Review at least once in six months.
You must have heard few complaints from your fellow colleagues or relatives that they have burnt their fingers while investing in mutual funds.
They lost all their money in mutual fund or they got very low return or no return/loss in mutual fund.
They are not able to get good benefits from their investments.
So, the Problem’s Solution is Regular Portfolio Review from an expert in this field.
Before moving further, let’s understand what is a Portfolio and Portfolio Review.
What Portfolio Review does for you
- Portfolio Review helps to exit/dump none performing fund and make provision for shifting money to other appropriate fund.
Suppose out of 5-6 funds, your two funds are not giving adequate return, and then these two funds can be replaced with new funds of same category or of different category so that your gains can be maximized.
- It also helps to give a shape to your scattered investments and suggests shrinking of over diversified portfolio (too many funds of same category) and if allocation is high in one sector or in one fund or in one category, it warns you of possible outcomes and does not stop here, it tells you what to do.
Many a times this happens that investors unknowingly or on someone’s advice keep on purchasing new mutual fund and thus create chaos for themselves.
To handle a very big portfolio is a task in itself. Additionally it does not carry any added advantage.
- Portfolio review not only elaborates the shortcoming of a portfolio but it makes newer provisions also as per your requirements.
- This also makes a suitable balance in equity and debt ratio so that your portfolio does not take additional risk which was decided earlier.
- Portfolio Review also ensures that your money allocation is not high in a particular investment class, so to make your portfolio well diversified.
- It makes it easy to take decisions faster aligned to your investment strategy, so that you do not deviate from your goal.
- If there is some discrepancy in fund or if you have chosen a wrong investment option while opting in the fund, Portfolio Review eliminates this risk also.
- Portfolio Reviewing enables one to know that how much shortfall will be there in case you continue the same investment. This enables you to take timely decision.
- It also helps to understand if any money lying in liquid mutual fund unnecessarily, so it can be shifted to targeted fund.
You can compare benefits of Portfolio Review with that of a Pomegranate.
As it is famous for Pomegranate, that it is one medicine for many diseases. It is just like preventive health checkup, which saves you from many diseases.
Conclusion:
Portfolio review is like a life line added to your portfolio. It helps to know your investments better.
Can’t you do it yourself then?
Usually we are too busy in our daily life schedules or we do not have necessary tools to know whether should we come of an investment or continue.
Portfolio review does all for you.
Portfolio Review aggregate, segregate, balances, gives adequate allocation to funds as per your future life goals, market outlook, your risk
