6 Reasons Why Your Portfolio Needs an Urgent Review

Most people put a lot of effort into creating and building their investment portfolios but do not review them periodically. This is a major problem. In this article, I will dive deep into why you should review your portfolio regularly. I will also mention a FREE tool that can help you review your portfolio at no cost. So, let's get started!

1. To Remove Underperforming Investments

Many investment schemes or funds do not deliver the returns they promise, and some even perform poorly. Removing underperformers and reallocating funds to better-performing options is crucial for long-term wealth growth.

For example, suppose you invested in a mutual fund that promised an annual return of 14%. However, in reality it's delivering less than 6%. If you don’t review your portfolio regularly, you may not even realize this and end up earning returns lower than the promised return.

2. To Organize and Properly Maintain All Investments 

Most people invest in multiple schemes, funds, and policies, making it easy to lose track of some investments. This is not ideal. Periodically reviewing your portfolio ensures that all your investments are accounted for and well-organized. 

You may have seen news reports of people discovering stock market share certificates or insurance policies after many years—investments they had completely forgotten about. To avoid such situations, it is essential to review your investments periodically.

3. Adapting to Market Changes

Financial markets are dynamic and constantly evolving due to factors such as economic trends, interest rate changes, geopolitical events, and technological advancements. These fluctuations can directly impact the performance of your investments.

To maximize returns and safeguard your wealth, it is essential to stay informed about market conditions and adjust your portfolio accordingly. This may involve reallocating assets, diversifying investments, or even exiting certain positions that no longer align with your financial strategy.

By regularly reviewing and adapting your portfolio, you can proactively manage risks, take advantage of emerging opportunities, and ensure that your investments continue to perform well in changing market conditions. This approach helps you navigate market volatility with confidence and enhances long-term wealth growth.

4. Recommitting to Your Goals

Life goals evolve over time. The financial objectives you had at 25 may not be the same when you turn 35 or 45. Major life events such as marriage, buying a house, having children, or planning for retirement can significantly alter your financial priorities.

Regularly reviewing your portfolio ensures that your investments remain aligned with your changing goals. If necessary, you can reallocate funds, adjust risk levels, or explore new investment opportunities that better suit your current financial needs. This proactive approach helps you stay on track and maximize your wealth in the long run.

5. Performance Evaluation and Risk Management

Regularly monitoring the performance of your investments is also very crucial to ensure they are helping you achieve your financial goals. If an investment is underperforming or not meeting expectations, you need to take action.

A periodic review also helps in managing risks. Market conditions and personal risk tolerance change over time, so adjusting your asset allocation accordingly is essential. By doing this, you can minimize potential losses and ensure your portfolio stays balanced and aligned with your financial strategy.

6. To Save Taxes

Tax planning is an essential part of investment planning. By reviewing your portfolio periodically, you can optimize your investments to reduce your overall tax burden.

For example, you might not be using the most tax-efficient strategy to hold certain securities based on their tax treatment. Additionally, many investors overlook the benefits of tax-loss harvesting, which allows you to offset taxable gains by selling underperforming assets at a loss. Even Investment taxation changes over time, so what suits you best can only be found once you analyse and review your assets.

I understand that reviewing and analyzing your investments can be challenging—it requires time, skills, and effort. That's why we are excited to introduce Zomint’s in-house Portfolio Review and Analysis Tool. With just your PAN number, you will receive a detailed analysis and review of your portfolio, along with actionable insights on what you need to do next.