Avoid Frequent Visits to your Portfolio

Posted On Monday, Mar 06, 2017

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It is important to think quality over quantity when it comes to managing your mutual fund portfolios. Investors easily get spooked and jump on the bandwagon mid-way just before the wheels come off when markets turn volatile. One has to realize that market volatility is unavoidable come what may. Simple psychological intuition points out that analyzing your mutual fund portfolios too often is more likely to get your heart beat to palpitate faster. Checking your portfolios once every year will bring you immense joy as compared to the persistent audits done on a daily basis. Regret can be your difficult comrade if you make a foolish move based on excessive investigation.


It is, without doubt, human to hate loss far more than we enjoy gain, leading to dreadful decisions in the name of loss aversion. An informed investor who wisely selects and observes his investments is less likely to keep a constant check on the durability of his portfolios. A very good reason could be that the investor has sufficient knowledge in the investment domain thus letting his investments grow at a steady pace without panicking during market crises. Dependence on the financial advisors broad knowledge of market trends and fluctuations could be another strong reason for the investors' limited check on his portfolios. An amateur investor who checks his asset allocation along with his investment performance too often panics when the market crashes or falls, which actually may be the right time to buy!


Here are five things to do while looking at your portfolio:


1.Revision of goals: Our financial goals keep changing. There are various factors that lead an investor to change, alter or add new ones to the existing list. For instance standard of living, inflation, new financial dependents make an investor want to revisit his investments once in a while.
2.Performance: It is necessary to check the performance of equities once in six months or a year and not in six hours or daily.
3.Broad diversification: Expanding the money of your mutual fund portfolio across sectors is necessary. Over diversification may lead to inefficiency.
4.Establish long-term investments: As an investor, you need to have patience with long-term investments. All investment ideas are unique in their own way. Hence, evaluation at the end of the investments lifespan will benefit the investor.
5.Oversee short-term inconsistencies: Mutual funds are generally risky in nature as markets can get volatile at any point of time. If an investors’ portfolio gets affected by the macro-economic market trends, due attention is necessary.

Therefore, as a long term equity investor, it is best not to overdo it. Once you keep these five points in mind, you should be okay.
Speak to your financial advisor for knowing the right time for a portfolio review.



Disclaimer, Statutory Details & Risk Factors:


The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. Please visit – www.quantumamc.com/disclaimer to read scheme specific risk factors.

Above article is authored by Quantum.

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