At What Frequency Should I Reassess My Portfolio

Podcast Duration: 05:29
Angel One podcast ke naye episode me aapka swagat hai!

Is podcast ki shuruaat ek sawaal se karte hain. Do the things you keep in your bedroom keep changing as you progress through life? Jab hum chhote the, toh humara room toys aur books se bhara tha. When we started growing up, we added a computer and took off the toys. As an adult, probably you have paintings hanging on the walls.

The point I am trying to take here is that your home changes in accordance with your age kyuki har age par needs alag hoti hain. You throw away the things you no longer need and buy some new things that serve your purpose.

Your investment portfolio works on the same principle. You start off with one combination of securities - that you think will fulfil your short-term and long-term financial goals. If a financial instrument no longer serves you, you sell it and replace with something else. As you grow older, you might want to take fewer risks and invest in instruments that have an assured return.

In short, with changes in your age and market trends, you keep modifying your investments and try to align your portfolio with your overall financial goals

This makes it clear: har thode samay me aapko apna portfolio reassess aur rebalance karna hoga - to suit your current requirements.

Ab coronavirus pandemic se hue disruption ko hi dekh lijiye. It is impacting the global economy and it is hard to point out ke konse asset classes safe hain aur konse asset classes have managed to maintain their financial health and stability. But the whole episode has opened our eyes to one very crucial fact: change is the only constant and uncertainty har jagah hai. Aise volatile market conditions ke chalte toh aapne khud hi apni investment ki file utha li hogi - most probably aap ye bhi dekh rahe honge ke kis tarah aap apne capital ko safe rakh sakte hain, konsi investments prudent hongi.

Aise time par portfolio reassess karna toh indispensable hota hai. What do we actually mean by rebalancing? Rebalancing your portfolio is quite simply selling the asset classes that are over-allocated and buying those that are under-allocated. Ye over allocation ya under allocation market fluctuations ke chalte ho jaate hai. Regular intervals pe portfolio ko check karne se you can save yourself from potential losses.

Kaise? All the individual securities in your portfolio come with a distinct rate of return, say over the course of 2 months, 6 months or a year. And these returns might change depending on the market conditions. Agar aap time par apni securities ko sambhal lenge, then it is possible for you to do course correction. In turn, this will control the risk exposure of your portfolio, as well as help, maximise returns.

Lekin ab sawaal ye uthta hai ke portfolio reassessments kab karni chahiye? How often should we reassess our portfolio? How often should we try and rebalance it, say, in a year? Let’s find out.

You’d be advised to rebalance your portfolio when you are closer to your financial goal. For example, if you are a parent who was saving and investing to be able to fund your child’s higher education and now your child is 18 and entering college, so your goal is nearing completion. Iss time par aapko ek naya financial goal banana hoga and then future investments accordingly karni hongi.

Another instance when you should have a look at your portfolio and tweak is if there is a major life event. It could be a diagnosis of a prolonged illness, your wedding, or the birth of a child. All such life events will change the way you approach money in general.SO it is important to have a look at your portfolio and see if it aligns with how you look at money now.

Another instance is when the economy is undergoing drastic changes. As an example, Agar economy recession me jaane wali hogi toh aapko preemptive action lena hoga taaki massive losses na ho.

You should also look at your investments and revise them if there is a drastic change in your earnings. Agar aapko bonus milta hai, toh use sahi jagah invest kreiye. Agar aapke business me earnigns kam ho gayi hain, toh apne portfolio ko kam earnings ke hisaab se revise kariye.

Jahan tak baat rahi frequency ki - it is clear that there is no solid answer here. Jo sabhi instance humne abhi discuss kiye, agar unme se kuch bhi hota hai toh aapko turant portfolio reassessment par lag jaana chahiye.

As a general rule of thumb, experts recommend that investors should examine allocations at least once a year but there is no required schedule for rebalancing a portfolio.

Yahan pe Calendar rebalancing ka concept can come in handy. Under calendar rebalancing, you set dates beforehand and assess the investment holdings in the portfolio on those dates. You could also choose to do these assessments on a monthly or quarterly basis. Ideally, har kisi ke liye alag frequency work karegi. To find your ideal frequency, consider the time constraints you have, the cost of the transaction and your risk-bearing capabilities.

On a parting note, main yahi kahungi ke apne financial portfolio ko up to date rakhna investor ki responsibility hai. Jab bhi life me ya economy me koi changes aate hain, it is a good idea to anticipate ke uska aapke investments par kya asar padega and make provisions and readjustments accordingly. It can save you a lot of money and even maximise your returns!