Invested in too many mutual funds? Here’s help in cleaning up your portfolio

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Middle East

Invested in too many mutual funds? Here’s help in cleaning up your portfolio

While restructuring your mutual fund portfolio, avoid over-diversification. October 14, 2021 / 10:30 AM IST Mutual funds have gained increased acceptance among retail investors over the past few years. There is a pick-up in SIP investments over the past few months, even as the Sensex crossed 60,000 levels. However, a lack of fundamental understanding about mutual funds and misleading financial recommendations often result in investors ending up with a cluttered mutual fund portfolio consisting of under-performing funds, duplicate investments and/or a sub-optimal asset mix. Here is a list of measures to clean-up your cluttered portfolio. Revisit financial goals Financial goals refer to the amount of money required to attain various life goals such as accumulating a corpus for your post-retirement life, home loan/car loan down payment and child’s higher education. Start by estimating the monetary value of each life goal after factoring in inflation and the time horizon. Use online SIP calculators for estimating monthly contributions required to create an adequate corpus for each of your financial goals. Decide your asset allocation strategy Many investors get influenced by emotions or by family members and friends during the investment decision-making process. However, such investments may not be in line with their time horizon

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