5 Simple Steps To Reviewing Your Investments


Ever wondered what the secret to wealth creation is? It’s quite simple – it lies in getting your money to work for you! The best way to achieve this is to invest your money. When your money is invested well it earns returns that grow and compound over time.

Markets are very dynamic – so opportunities continuously evolve, newer investment avenues open up, and some investments go out of style. It’s always important to align your investments with their future performance potential. This makes regular investment reviews a part and parcel of your wealth creation journey. A review may seem like a complicated task, but it can be done in five simple steps.

  1. Consolidate your investments

The first step is to consolidate your investments by taking stock of all your investments. This allows you to look at your larger investment picture and identify certain trends. It will also show you what your asset allocation looks like. So, based on the big picture you can check if your investments are aligned to the market cycle, your goals, and your risk appetite.

  1. Understand their purpose

Peter Lynch famously said, “Know what you own and know why you own it.” Every investment in your portfolio should have a purpose. Suitability of an investment product to a goal becomes easier to assess when you know its purpose. Mapping an investment to a purpose inculcates discipline in the investment process. A clear mapping ensures that goals can be tracked, measured, and achieved in a smooth and hassle-free manner. Understanding the purpose of each investment is the second step.

  1. Review Quality

In investing, preserving capital is of paramount importance. High-quality investments almost never stand to lose. Reviewing the quality of investment ensures that some filters are in place to protect your capital. Deterioration of quality is always a reason to reconsider sticking with an investment.

  1. Assess Performance Potential

The fourth step is to assess the performance potential. Is your investment poised to deliver in the future? Assessing future performance potential usually requires professional guidance. An expert will be able to objectively evaluate which assets are likely to create value. Investments that have lost their potential to perform need to be weeded out and those that are likely to bear fruit should be nurtured.

  1. Create A Restructuring Plan

The last step is to restructure the portfolio. Some exits would be measured, whereas others are swift. Similarly, the opportunity may be compelling or may gradually emerge. Either way, the restructuring requires timely effort and must work to a flexible plan.

Those who take the initiative to review and reconstruct portfolios will benefit from emerging trends and opportunities. Get your investments reviewed by a professional before the financial year ends. Contact us to make a smart investment in your future!

Leave a comment

Open chat