Investment 101: How to rebalance your portfolio for FY27 - top mistakes to avoid
This article provides guidance on rebalancing investment portfolios at the start of a new financial year. It explains how market fluctuations can shift asset allocations and why periodic adjustments are necessary to maintain risk-return objectives.
Why it matters
Proper portfolio management is essential for individual investors to ensure their long-term financial goals remain aligned with their risk tolerance.
The author is CEO of PaisabazaarFor many salaried individuals, a new financial year begins with bigger paychecks and bonuses. With higher income, the immediate instinct may be to invest in a new mutual fund scheme, increase SIP contributions or explore other investment avenues; but, it also presents a great opportunity to review and rebalance your current investment portfolio. After all, your risk tolerance, financial goals and tax strategies may have changed over the past year. So, it would be prudent to ensure your portfolio is still where you want it to be. Why Do Portfolios Need a Periodic Review?When building an investment portfolio, investors decide on an asset allocation. Let’s say, a portfolio comprising 70% equity and 30% debt investments. This allocation should be a well-thought out decision that an investor should make after considering his age, financial goals, income, risk tolerance, etc.
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