If you have a well-diversified portfolio comprising stocks, mutual fund SIPs, NCDs, IPO, CFD, bonds, ELSS, and other instruments, it becomes vital for you to assess the health of your wealth. In this article, let’s quickly look at 5 tips to assess the health of your wealth.

Having a performance monitoring system matters a lot

It will help you a great deal if you create a mechanism to monitor your portfolio’s performance at regular intervals. This could include quarterly or semi-annual review of your mutual fund portfolio and other equity & debt investments. If it is difficult for you to track your investments that regularly, then at least try doing it once every 18-24 months to stay on top of your financial growth plans.

Watch out for any changes in your portfolio

In case of mutual fund investments, especially equity funds, compare your funds’ performance with that of the performance of BSE Sensex or similar schemes floated by other mutual funds. This will give you a good idea of how your fund is performing. You can perform the same exercise with stocks and other asset classes.

Always check if your portfolio is helping you stick to your financial objectives

Please do not ignore this step. It is extremely crucial that your investments are always mapped with your financial goals and must help you achieve them within the given time horizon. In case they are not, it’s time for you to make the right changes to your portfolio to get them back on track to achieve your objectives. For instance, if your life insurance cover isn’t enough, you can increase your life cover. Likewise, if one SIP of Rs.2000 is not enough, try opening another one to ensure you meet your financial goals through your investments.

Regularly read newsletters, annual reports, and other published information of companies that you have invested in

This is again a crucial exercise to manage the health of your wealth. Newsletters can provide you with key company updates whereas annual reports are a good way to understand a company’s profitability, asset growth, and future prospects. Staying well-informed is one of the best ways of staying on top of your investment portfolio.

Do not leave your portfolio’s underperformance unattended

The last thing you would want to do is to leave your portfolio’s underperformance unattended. That could have a telling impact on achievement of your overall financial goals. In case your reviews show that your investments have not been doing well for two consecutive quarters, do not ignore it and delve deeper to find all the reasons.

For more information on effective ways of portfolio tracking, write us at [email protected]

Mutual fund investments are subject to market risks. Please read the offer document carefully before investing.