Rebalancing: Doing so will restore the asset allocation you may have decided upon based on your investment horizon and risk appetite, and also lower the risk in your portfolio
As one year ends and another begins, investors should review their portfolios. If you have chosen the right funds that are suitable for your risk appetite and time horizon, then checking your portfolio once in a year should suffice. Besides bringing the portfolio back to the asset allocation your financial advisor or you had decided upon based on your risk appetite and time horizon, rebalancing will also allow you to book gains and reduce the level of risk in your portfolio.
Go back to original asset mix:
Most investors have a mixture of equity funds, debt funds, and gold in their portfolios. In the years when equities do well, they come to have a higher weight in investors’ portfolios. This is what happened in 2017. Equity mutual funds have given much higher returns than debt funds, so the weight of equities in your portfolio would have increased. Therefore, you need to book some profits in equities in order to restore the asset allocation of your portfolio back to its original level. Another way of restoring the original asset allocation is to invest fresh money in the asset classes that have performed poorly, such as debt funds and gold this year.
Esta historia es de la edición January 2018 de Investors India.
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 January 2018 de Investors India.
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
ASK THE EXPERT
Ques. One of my friends told me that your company provides detailed Retirement plans. I want to know what is the procedure to get my Retirement plan. I will be retiring in March 2025. R.P Gupta, Noida
How to Naturally Reverse Fatty Liver Disease
The liver, located on the upper-right side of the abdomen, is the body’s largest internal organ and plays a critical role in detoxifying the blood and processing nutrients.
Banking sector which has underperformed in the last two years, now offers a favorable risk-reward profile
Do you think the market is overpriced? Is yes, should investors refrain from investing in index schemes at the current valuation?
India will continue to enjoy benefits of a close US relationship and trade will continue to grow
Q1. The US elections are said to be one of the closest till date, what impact will the election of a Republican / Democratic party have on the US economy and how is that going to affect India in the short as well as the long term?
Understanding Momentum Funds
Momentum funds are a type of investment fund that focuses on companies experiencing positive momentum in factors such as earnings, revenue, and stock price movement.
Risks and opportunities associated with Small Caps
Small-caps are a stock-picker’s paradise.
How to navigate your portfolio through bull market a
Indian equities have been in a bull run for the past four years.
Choosing mutual fund schemes depending on your age to achieve life goals
The choice of mutual fund (MF) scheme might be influenced by one’s risk profile or age.
Thematic Fund Or Sectoral Fund, Which Fund Suits You?
A thematic fund is a type of mutual fund that focuses on investing in companies based on specific themes or trends.
Be Kind To Your Kidneys
The kidney is a vital organ in our body which is four inches long and two and a half inches in width.
