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Portfolio Management

Guidelines For Portfolio Management

Before we conclude, let us note down a few helpful tips that will help you manage a portfolio better:


1. Understand your risk tolerance – Very important. Often we think we can take the risk, but when the market actually falls, then we cannot keep patience and make hasty decisions. 


2. Be patient – Markets go up and down. That’s normal. Be patient.


3. Define your investment time horizon – A very important aspect. Make a rough timeline of when you will need the fund and invest accordingly. For example, if you need a fund for a specific purpose next year, it is better to avoid the stock market. Keeping a fixed deposit may be more suitable. 


4. Choose assets you know about – Don’t go for assets because you think they are good or others are investing in them. Choose assets that you know about – how they behave, how risky they are etc. For example, these days you will see hundreds of advertisements about cryptocurrencies. You may be enticed to invest. But cryptocurrencies are highly volatile and entail a very high risk. Hence, if you don’t know about it, avoid it. 


5. Learn, learn and learn – There is no end to educating oneself, especially when it comes to financial markets. Keep learning and exploring. This will help you learn about new markets and new products.


6. Keep a global perspective – There is a world of opportunities out there. Don’t restrict yourself to a specific product, asset, market or industry. A holistic viewpoint and a portfolio perspective will better help you in allocation decisions.

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Units 16/16