Generally, when it comes to mutual fund investments, the word that is used is “portfolio”. “portfolio carries all financial investments like stock, bonds, etc.” Many times we do certain types of mistakes in our portfolio, which affects the returns.
Portfolio management is an important skill. Following are the important things for managing a portfolio ideally:
The first and important mistake that should be avoided is carrying too many investments in one portfolio. If one scheme is performing well and one is not so good, then it can affect your overall return. Moreover, it can create confusion. So, avoiding that 3 to 4 investments in one portfolio is ideal.
It is important to monitor returns periodically in the portfolio. Nowadays, mutual fund companies do provide what’s app facilities, etc. Through this, you can get the account statement, check valuation, etc., and can monitor the returns in the portfolio.
The folio should be revised. If you feel that certain schemes are not giving returns as per your expectation for a long time, then you can go for options like STP i.e. Systematic Transfer Plan, where from one scheme, your invested money gets transferred in another scheme. So, here for STP, you can select the scheme, which you feel can give good returns in the future.
A mix of debt and equity in the portfolio should be ideal. It depends upon risk appetite and many other factors. To decide the right mix of debt and equity, the financial planner can be hired.
Avoid having the same or similar schemes in a portfolio. Schemes which have similar risk profile and features should not be included in one portfolio. An ideal portfolio is a diversified portfolio.
All the details should be updated like nominee details, etc. in a portfolio. Along with that, KYC and PAN numbers should be updated for all people who are holding the folio. It will be helpful in the future in times of redemption or transmission etc.
If you feel you have too many portfolios and in all of them, investment is not in too many schemes, then, you can consolidate the folios as per your wish.