Rashmi Wankhede believes while wealth accumulation depends on taking the right investment decisions at the right moment, it also equally depends on managing portfolio smartly. She finds out how an investor should effectively manage portfolios to make more of the investments made.
Peter Lynch- American investor, mutual fund manager, and philanthropist, once said: “Know what you own, and know why you own it.” Portfolio management rests on the same theme that one must know which fruits investors have in their baskets and their appetite for them. Portfolio management is a long distance run and there are no short cuts to it. James Morton rightly said: “Most people who make lot of money in the markets over the long term do not trade frequently.” Investors should follow the same line of action while building up their portfolios and should focus on investing rather than trading.
History suggests that one should start early in working life to build up one's portfolio as there are less financial obligations at that time. It can fetch them huge returns over a period of time by getting advantage of the time value of money. The first thing to build up a portfolio is to determine your investment profile. This exercise is useful to evaluate your financial needs, time frame, tolerance to risk and objective behind building up the portfolio. It will help you understand the type of investment you are looking for and, accordingly, decide on the investment strategy for the same. Knowing one's needs and goals, one can allocate funds for different assets, including cash, stocks, bonds, commodities, etc while creating the portfolio. Asset allocation depends on one’s income, so the larger the income, more asset classes and risks can be taken by investors.
Investors should also check their tolerance to risk. If one remains calm in volatile markets and holds on to the position, then he has high tolerance to risk. If one gets anxious on such fluctuations, then he has low tolerance to risk. If one can’t bear such fluctuation and gets hyper on every dip, then such investor should avoid investing in stocks and play safe by holding cash and debt assets only.
Esta historia es de la edición March 19 2017 de Dalal Street Investment Journal.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor ? Conectar
Esta historia es de la edición March 19 2017 de Dalal Street Investment Journal.
Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.
Ya eres suscriptor? Conectar
How To Invest In An Ageing Bull Market
Bull rallies (periods when stock prices rise) and bear declines (periods when stock prices fall) are natural parts of stock market cycles, but they don't follow a fixed timeline.
Should You Entrust All Your Money To A Single AMC?
If you are a market participant, you have probably heard the quote 'don't put all your eggs in one basket', which suggests diversification. Investors often focus on diversifying across categories like large-cap, mid-cap and small-cap, but they may unintentionally overlook diversification across different AMCs. The question arises: is AMC-wise diversification really necessary? Rakesh Deshmukh takes a closer look at this scenario
Wild Swings Engulf Global Equities
U.S. stock markets experienced significant volatility. An early-week rally pushed the markets to new highs, but this momentum faded, primarily due to weaknesses in the tech sector. The major indices had a mixed finish with, S&P 500 and Nasdaq closed lower, while the Dow recorded a notable gain.
U.S. Elections and China's Economy Hamper Commodities
Commodity markets experienced selling pressure in the last fortnight, driven by uncertainties surrounding the upcoming U.S. presidential elections, concerns about the Chinese economy, and increased agricultural production in Brazil.
Wealth Building For Retirement Through Mutual Funds
Retirement is one of the most crucial and lifechanging phases. It marks a period where maintaining your lifestyle becomes paramount even though your regular income stops.
Mastering Investment with Information Ratio
Information Ratio helps in navigating the complexities of the investment landscape by assessing an active fund manager's performance. And though it has its limitations, it remains an essential part of the finance industry. The article explains what Information Ratio is and how investors can use it as another tool
Plan To Be Financially Independent
Each of us aspires to be financially independent as it ensures having enough resources to be self-sufficient and control our finances.
❝Technology is the new game-changer"
With a new breed of young investors entering the financial markets, it is the use of technology that is increasingly playing a major role in how investments are done and tracked. Anand Radhakrishnan, Managing Director, Sundaram Mutual Fund, shares his opinion about how this factor is turning into a significant tool and how it will shape the strategies of his company
What If Donald Trumps?
The potential election of Donald Trump as president in the U.S. carries significant implications for the Indian equity market. It could lead to changes in the global trade dynamics, in particular affecting the Indian IT sector while also raising inflation levels and leading to yet another revision in the visa programme for Indians who want to work in the US. The article takes a closer look at what may lie in store
Sectoral Gains Make A Mark
Benchmark indices continued their uptrend, reaching new record highs, although the pace has slowed as the broader markets faced selling pressures
