Ask our experts – November 2022

How often should I analyse and rebalance my portfolio? How do I evaluate and track the performance of my funds? – Anand K, Chennai

 Review and rebalancing of MF portfolio depends upon the tenure of investment. For short term goals less than 5 years, the review could be done once in 6 months. If otherwise a yearly review would suffice.

Evaluation of invested schemes to certain extend should be done by investor himself. Check for any change in fund management because performance is a function of the one who manages the fund. One could look at the Sharpe ratio, SD which is standard deviation as well as Portfolio Turnover when assessing fund record along with past performance. A higher Sharpe and lower SD and portfolio turnover related to other schemes in the category could be compared. There are several other parameters which are complicated and requires expert assistance. Any decision however should be taken based on expert recommendation.

What about a recession in the USA? IT stocks are going to impact heavily, right? – Vijay

The recession and its impact on IT stocks are well-storied. That is the reason why it has seen consistent selling through several months by FIIs. However, having put everything in perspective, sometimes, you tend to look at risk reward also, which is when some quality IT names are worth having a re-look, despite the US recession threat. Also, remember there is also the tailwind support from a weak rupee for IT stocks.

 I am 24 years old and have just started earning. My salary is Rs. 40,000 and I want to start saving and investing for my future. Kindly advise which mutual funds I should invest in and what percentage of my income should be set aside for this.

A simple thumb rule for you would be to invest at least 20% of your take-home income, which is Rs.8000 in your case. If you can set aside a higher amount it may help you generate a bigger corpus in the future. A monthly investment of Rs.8000 made for 30 years at a return of 7% would fetch you a corpus of around Rs.1 crore by the time you are 54 years old. The more you invest the better financial security it offers. To view fund recommendations, click here

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