Managing and growing your investments over time requires a financial plan. It includes short-term and long-term investing goals along with details like risk tolerance and asset allocation. This plan then needs to be reviewed over regular periods to incorporate any personal/economic changes & evaluate the performance of the investments so as to achieve your goals successfully. September end marks the finishing of half the financial year and at this point of time, some key points should be evaluated, course corrected and reformulated to ensure a successful investment.
How circumstances have changed during the period?
The circumstances in life determine the goals and if the circumstances suddenly change during the course of investment, you need to account for them and adjust your future investments accordingly. These adjustments are an important part of the review. Suppose at the beginning of the year, you were aggressively taking risk but during the year you realise you are not able to take so much risk due to some changes in the circumstances or just realisation of your real risk tolerance, then you may need to shift your money to safer investment avenues.
Are the portfolio returns in the first half as expected?
This is the question that is closest to the investors for gauging their position. To know your position, you should list out all your goals that were set at the beginning of the year and see the percentage of the completion of those goals. Some would be more, some could be less; it is completely normal but we need to look out for the ones which are moving in the opposite direction. Once identified, we should gauge depending upon the nature of investments if it can reverse and still provide the required rate of return or there is a need to look for alternatives.
Have my life goals changed?
Over time life goals tend to change. You may want to further your education or decide to live in a better neighbourhood. These changes in the life goals will affect your investment goals and this may lead you to review your investments critically. You may be achieving your earlier investment goals but making investments dynamic and correcting course is required at this stage.
Have the Market conditions changed over six months?
There is a lot that has happened this year like the crude oil prices rise, rupee depreciation, trade wars between USA and China, Turkey crisis and Kerala Floods. There has to be an analysis of how events can change financial conditions like inflation rate, economic environment etc. & thus affect the performance of your portfolio. You may have to adjust the investment and goal amounts based on these on-going financial conditions to make your goals more realistic and achievable.
Has my income changed considerably?
Just as expenses can change in 6 months’ frame, there can be expected or unexpected rise in income. Windfalls like seasonal business income, mid-year bonuses or a significant hike in salary can be channelled into investments. This kicker may help you achieve short term goals faster.
You’ve done well in starting planned investments at the beginning of the financial year. Now, a mid-year review could get you closer to all your financial goals.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.