Things to Remember When Reviewing Your Financial Investments

Things to Remember When Reviewing Your Financial Investments

Indian Market
by 5paisa Research Team Last Updated: 2022-03-30T12:17:25+05:30

A regular review of investment portfolio helps in monitoring if investors are meeting their financial goals as planned. It is, therefore critical that every investor maintains a discipline to check his/her savings or investments and make changes whenever the need arises. Convinced enough to revisit your investments? Consider these essential factors:

Set A Regular Review Date -

Setting a regular review date allows investors to conduct a regular check-up of their investments in a disciplined manner. A portfolio can be reviewed monthly, quarterly or in a yearly basis.

Maintain Your Investment Strategy -

Usually, people tend to get excited at any seem-to-be profitable opportunity/tip suggested by friends or peers and end up taking decisions completely opposite to their strategies. Investors should not get carried away with such suggestions and follow one strategy.

Consider Your Risk Profile -

Readjustments in an investment portfolio should always be in-line with the risk profile of investors. Sometimes an investment which looks as an opportunity can bring a lot of extra risk to the portfolio.

Look Beyond Buy At Low & Sell At High -

Rebalancing isn’t always about buying at low and selling at high. It also means identifying opportunities where investors may find a better stock or any other investment asset at a fair value.

Tax Implications Due To Rebalancing -

Tax implications should be taken into consideration while making any alteration in a portfolio. Many a times investors tweak their portfolios a lot for the sake of re-balancing. Missing this crucial aspect might lead to a heavy tax burden of 30% on profit (for stocks or equity mutual funds if holding period less than a year for).

Consult An Advisor -

Taking advice from an advisor or a professional is better if you are new to investments or find that the changes you need in your portfolio are complex to make.

Conclusion -

The phrase - Take care of your money and it will take care of you - holds true when it comes to reviewing investments. Monitoring our savings and investment portfolio helps us identify the poor-performing assets in it and make timely needed adjustments.

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