Portfolio Makeover

• Invest Systematically.

• Don’t invest in too many funds (avoid over diversification)

• High Allocation to a single sector makes your portfolio risky and imbalanced.

• Be Regular and Disciplined. It is not possible to time the markets, nor should one try to do so.

• For balanced portfolio invest some part of your portfolio in Debt.

• Avoid speculating and stick to funds that have proved their mettle.

• Invest in well rated funds. Look at a 3-5 years performance history and ratings before investing.

• Quality is more important than quantity. Investing and managing in many funds can made your portfolio unmanageble and hard for tracking.

• Invest in fewer funds and do not invest in new fund offerings.Add a new fund to your portfolio only if you already have a protfolio for mutual funds and if it adds a unique diversification.

• Re-check the allocation and re-balance the portfolio (if required) at least once a year. This should also be done when stock markets crash or rise rapidly in a small interval.

• The SIP approach can also be adopted in stocks (of course it is not as simple as a mutual fund SIP). If you consistently buy a stock on a regular basis, it would help you average the cost over time. Make sure you do collect some important information before choosing a stock or consult an expert.

• Do not track your mutual fund portfolio every day. Tracking funds’ portfolio once in six months should suffice.

• Do not worry about short term fluctuations. Market sentiments can change overnight.

Guest Post :  Source – Gayatri Jagdale

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