What is a Portfolio Review?
Portfolio Review is a service to give you an Independent overview of your existing investment strategy. It basically tells you the status of your investments and if there is a scope to improve. So it is important to perform regular checkups to assess your portfolio strategy, asset allocation and to revisit your investment plans & goals.
Why is it Important?
Things change, markets shift, fund managers develop new strategies, and your life evolves. These factors can change your portfolio, so it is important to review your financial portfolio periodically. Our portfolio managers analyze your portfolio and provide a feedback on the current investments and recommend the future course of action.
Portfolio Review helps you to take an action in the ‘present’, so that you don’t have to worry about your ‘future’ and be focused on achieving your financial goals.
What are the Major Checkpoints?
All asset classes have their own cycles (up and down). So, it is important to spread your investments in various asset classes. Asset allocation is different for every investor depending on his goal, risk profile & time horizon. An optimum asset allocation helps to minimize the volatility and maximizes returns of the portfolio.
Every portfolio has two types of risks. 1) Systematic risk also known as market risk. 2) Unsystematic risk which is specific to individual security e.g. liquidity risk, default risk, regulatory risk, and duration risk. It is difficult to manage or predict the systematic risk however, unsystematic risks can be managed, and overall risk of the portfolio can be reduced with the help of diversification and using other strategies. Portfolio review helps to identify and mitigate such risks.
It is the process of spreading your investments across asset classes or market capitalization so that your exposure to any one type of asset is limited. This process is designed to help reduce the volatility of your portfolio over time. It also helps to balance risk and reward of your investment portfolio.
Portfolio Performance helps you determine how your portfolio has performed compared to the benchmark & peers. It makes you understand if the existing investments would help you to achieve your goals.
Portfolio rebalancing safeguards the interest of investor from being overly exposed to undesirable risks. Generally over a period of time every asset class is affected with the market cycles. This tends to change the alignment of the portfolio which in turn can make your portfolio biased towards one asset class. While it is important to review your investments on a regular basis, making changes to your portfolio to rebalance is also necessary.