HOW TO EVALUATE INVESTMENT PERFORMANCE

  1. EVALUATE INVESTMENT PERFORMANCE

A good investor doesn't just invest - they monitor and evaluate their portfolio regularly. Read this blog to know how to stay on top of your investments. Investing in the best assets is not enough. Because what’s best for you today may not be the best for you tomorrow! Investors either realise this too late or don’t realise it at all. But there's a solution to this - evaluating or assessing your portfolio.

Assessing your portfolio periodically can help you understand if you’re gaining profits or losing money. Furthermore, you must constantly nurture your portfolio to reap the rewards of profit in the future.

If both these aspects seem confusing, you've come to the right place. This blog will help you learn about 4 important ways to evaluate your existing portfolio.

4 Steps To Evaluate Your Portfolio

1. Track Your Portfolio’s Performance

Check each investment’s returns and compare it to other schemes from the same category. This will help you understand how your investments are doing. But it’s important to note that you shouldn’t compare apples to oranges.Comparing a stock to gold or a mutual fund scheme to P2P lending won’t get you anywhere. Instead, you can check your overall portfolio performance to gain insights.But if this sounds lit a lot of effort, you'd be glad to know that there are trained experts who can do a financial check-up of your existing portfolio.

2. Check Your Portfolio Allocation

Your portfolio allocation should have an ideal mix of diverse investment options like stocks, mutual funds, ETFs, gold, p2p lending, and more. A diverse portfolio may have a better chance of giving better returns over the long term while lowering the risk.  Portfolio allocation may vary depending on factors like your investment goals, age, and risk profile. Even market trends may impact your portfolio allocation. Example: For stock allocation, investors are known to follow this golden rule: Subtract your age from 100. Whatever remains should be your stock allocation.At 30 years old, you would allocate 70% of your portfolio to stocks. But this could vary based on your goals.

3. Identify The Fees You’re Paying

Types of investment fees that you might have to pay: 

  1. Expense ratio
  2. Entry load
  3. Exit load
  4. Advisory fees
  5. Transaction Fee
  6. Brokerage charges

 Pay attention to these charges since they can eat into your profits. The age-old rule applies here: lower the fees the better.

4. Assess Your Goals

Your portfolio allocation is directly linked to your goals. If it isn’t, then that is a big issue that you need to address. Goal-based investing can give you a clear idea of what should remain or be sold from your portfolio.For example, it would not be ideal to invest in mutual funds to finance your MBA in the next 2 years. Mutual funds are long term investments which are known to deliver profits over 5+ years.A trained expert can help you allocate your portfolio in investment options that are suitable for your goals. Otherwise, you would be shooting in the dark hoping that something would stick. 


Location: China

Comments

Post a Comment

Popular posts from this blog

Every tick of time creates history

Image
ESTHER ESTI In life, we stay and live like time is free. The word "Time" means "Hour, minutes and seconds". We live each and every day to achieve a certain things in life which involves time. Time is precious,time is priceless and every tick of clock creates history. Time management is very important in our life and it matters most both in our happy season and sad moment. Live a life that when in the old age you flashback and smile that I did this. It makes you happy because it's now a history to you. History remarks the time an event occur and teaches the upgrowing ones base on experience of the past which can happen or change of alternative to happening. 
Read more

LIFE AND HEALTH ALERTS NEEDED

Image
Life is a journey which never has an ending. We struggle everyday for survival and to achieve different goals at different intervals. Life has different stages which every existence faces    Let's jump into how to make life easier which are listed as follows;  Spiritually alerted : In this life, Everyone has different belief and religious ways of doing things. Spiritually alert means communication with your God. We always need to be in contact with our God daily on everything we do so as to create a way or prevent us from dangers that occurs everyday. Execercise : This is the most important physical medical treatment for the system. We need to do execercise at least thrice every week to maintain a healthy body and fitness. Medical checkup : In this situation, the medical sector seems to be doing their best but how many people has the cash to patronize them. The issue is as a result of the countries economy which impose inflation on prices of everything. The me...
Read more

Stay healthy and positive in Life

Image
Life has been so much attached by people either to impress or depress some people. Alot is passing through people's Life, so catch the fun while some feel frustrated. We begin to wonder what life is all about.Some begin to question their God what their purpose is all about in this Life. The major issue their is that you can't cuz the cake and have it back. What you sow is what you reap and this is where we got it wrong. Fear the law of karma it really exist in Life. Do to others what you want others do unto you.  God has created everything and given us things to get rich but what matters is how we use ours. So many are inclined with their phone all day that they lost hope about the future. Alot is happening to our life with the new technology system in the century. Crimes, violence, rape case, killings, suicide etc with so many not listed here which we face on our daily lives. To make a living starts with helping people around you. When you put a smile on the people...
Read more