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“Ask and it will be given to you; seek and you will find; knock and the door will be opened to you. For everyone who asks receives; the one who seeks finds; and to the one who knocks, the door will be opened. Matthew 7:7-8

11 Nov 2018


Hi Friends, How to Evaluate Your Investment Portfolio’s Performance?

1. Review your present net worth and particularly, the value of your investment portfolio regularly.  This is something you’ll want to try to do periodically.  Keep up with your accounts at your discount broker, bank or Mutual Fund Company.  Some finance bloggers who do it on a monthly basis, but every three to six months may be sufficient for your regular net worth checkups.  Knowing where you stand is the first step to gauging how well you’re doing overall.

2. Check how your portfolio is doing against its benchmarks.  With the market, everything is relative.  You’re doing very well if your investments are performing at least as well as their respective indexes.  Check each of the asset classes that are represented in your portfolio and see how they’re doing against their comparative index and if there are discrepancies, figure out why!  Those prospectuses fund/company stock reports and investment performance reviews that come by your home or online inbox every few months are quite handy because they explain what the deal is with your holdings.  For example, if your whole portfolio is primarily invested in equities, see if it’s doing at least as well as the Total Stock Market Index, which tracks the entire market.

3. Compare the individual investments in your portfolio against their peers in the same asset class.  Each of your funds or stocks is part of a bigger universe of like investments.  I’d suggest comparing how your individual fund or stock is behaving relative to other funds or stocks that are in the same industry or sector.  You’ll have to be careful about comparing apples to apples though, but if you note some glaring differences or a pattern of under performance, it may be time to do some switching,

4. Ensure that your investments remain on target according to your established goals.  Evaluate how each investment is doing and confirm its place in your overall plan.  Since our lives shift and turn with the ears, it is also quite possible that our investments may need to be revisited and perhaps adjusted accordingly.

5. Make the necessary updates and tweaks to your portfolio on a regular basis.  If need be, actually take action and do the necessary work to read just your portfolio.  If your portfolio has shifted from its desired allocation, or your life plan has put a monkey wrench on your financial picture, then make the changes.  Sometimes, it’s not even your choice to make adjustments.  Suppose you are a long term investor for 3 years, 5 years or more, periodical assessment is essential at least in every six months.  It is better to take advice from an experienced or qualified person relate to share market and make changes in your investment portfolio, if it is necessary. 

Good Luck.                                                                  See You Later.

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