Money9 Helpline| How often should you review your investment portfolio?

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What is the trick to becoming an astute investor? To get the basics right. How frequently do you check your mutual fund investment portfolio? Careful monitoring and reviewing your portfolio is the key to generate wealth more efficiently. While one does have fund managers who keep an eye on your schemes and try to maximise the yield, but at the end of the day it’s your money and nobody can care about it as much as you.

Irrespective of whether you’re a beginner, first-time investor, or a well-aware investment veteran, money matters can never be dealt with a casual approach. A hands-on approach enriches your knowledge and helps you develop an instinct about where to put your money to gain the best results.

Here are some reasons that justify why reviewing your investment portfolio at regular intervals is the key to successful wealth creation.

1. Fund performance 

Have you ever experience this: You invest in a particular mutual fund scheme with a predetermined objective but due to some major event, the market takes a different route altogether and the stock doesn’t perform in accordance with your plans. But if you keep a sincere eye on these funds, you’ll sense the change and have enough time to calculate your next step. Keeping a periodic eye on your investments can prevent a step taken in hurry to avoid a possible loss.

2. Portfolio diversification

As the market is extremely volatile to changes, it becomes crucial to constantly update your portfolio with diverse funds that can cumulatively give good results. But how will you time this diversification to yield the best results? The answer is, by constant reviewing, evaluating and maintaining the portfolio’s sync with market activity.

3. Financial goals

You might not change your financial goals upside down but there are constant additions to these goals as you grow older and your responsibilities increase. These small additions have a huge overall impact on your financial goals. While you must be aware of these additions individually, their overall implications can be sensed only by frequent review of your investment portfolio. It will help you expand or shrink your portfolio as per the new changes to your long term financial objectives.

Common queries

In a recent episode of Money9 Helpline, callers had various doubts related to their present portfolio with respect to the changing market trends, especially considering the uncertainties of the pandemic.

“My age is 42, I have invested Rs 10,000 in the Kotak Flexicap fund via SIP in the last 3 years but this fund is not outperforming in its benchmark, should I continue or exit? My horizon is 5 years,” Ashish Patel asked.

Harshvardhan Roongta, who is the founder at Roongta Securities, was the expert guest answering queries on the show. Here’s what he advised Patel, “I don’t think the fund is not performing well. It is a good-performing fund and must be beating the benchmark. However, it is quite possible that in the peer category, the performance might not be top-notch. I would suggest that you hold on to it for another 3 years and after that, you can consider booking profits from equity to debt.”

Another caller Abhishek Gupta was confused about whether he should invest in focus funds or index funds, “I’m already investing in the SBI Bluechip fund, UTI Nifty Index fund, and Axis Focus 25. Should I stop my investment in focus fund and invest that amount in an index fund?”

“All three schemes are good. The SBI Bluechip is actively managed large-cap, UTI Nifty index fund is a passively managed fund and Axis Focus 25 has a Flexicap approach. You should stay invested in the three,” Roongta advised.