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Tata Capital > Blog > Wealth Services > How to plan a healthy portfolio this financial new year?

Wealth Services

How to plan a healthy portfolio this financial new year?

How to plan a healthy portfolio this financial new year?

We have always looked at health and portfolio from varied perspectives, in this article we look at how one can build a healthy portfolio that will not only take care of our wealth but will also provide peace of mind, which will, in turn, provide good health.  Here are a few tips on how to achieve the same:

1. Don’t procrastinate, start your financial planning in April:

We often postpone our financial planning too much later during the year, there are times that you postpone it to the 11th hour. This will only lead to making haphazard investments, especially towards tax savings.

Even from the perspective of financial planning, you should ideally initiate your savings immediately after you receive your annual hike in April.

Additional Read – 5 Investment Rules that can help you sail through this year

2. Do monthly instalments as well:

Often people are of the view that investing is an exercise that requires a huge outlay of funds. However, this is contrary to reality, just like small drops of water make the mighty ocean, small investments can build substantial wealth.

3. Sketch out and initialize your tax planning at the start of the year:

If you are a salaried employee, you will be reminded to fill out your income tax declaration at the start of the year, to enable the tax department in your company to deduct taxes at the source.

However, it is important to implement the declaration that you have already made. This sets you out on a concrete path to optimise your tax planning right at the beginning of the year.

4. Review your portfolio and goals periodically:

The portfolio once decided should be periodically reviewed, the financial goals that you have chalked out should also be periodically monitored. Such monitoring will ensure that your portfolio is aligned with your financial goals. It also ensures that your catch any deviation on time and make required changes to the goals or portfolio as required.

5. Do tactical and strategic realignment as required:

To achieve optimal returns on your portfolio you must conduct tactical and strategic realignment. Tactical alignment is conducted as per market directions, this may be done to achieve optimal returns.

Strategic realignment is conducted less frequently and only if there is a change in financial goals, risk appetite and corresponding stage of life.

6. Invest in only those instruments which align with your risk:

Whilst building a healthy portfolio, it is important to align all the instruments in line with your risk appetite. Specifically, your equity exposure should be well within acceptable limits. An elaborate risk assessment has to be conducted before your portfolio is designed, such evaluation has to be periodically revisited.

In case you have moved up the value chain in terms of stage of life, then the risk would also change. This has to be incorporated into your portfolio within a reasonable time.

7. Ensure you have adequately hedged your life and health risk:

The most important step in building a healthy portfolio is to hedge your life and health risk. By ensuring that these critical aspects are taken care of, you will be relieved of your financial stress.

This is one of the key factors which will pave the way for better health in a true sense. Without hedging your health and life risk, the investment planning effort remains incompletely.

Additional Read – What is Equity Mutual Fund?

8. Stay committed and disciplined to achieve what you set out to achieve:

Discipline is the most critical aspect that we often miss in life, it holds good for investments as well. While they say, “well begun is half done”, in investing you must stay focussed on staying committed to your initial plan.

The longer the time horizon, the more effective the magic of compounding. Many investors may also give up on their investments due to anxiety especially when the markets are extremely volatile. It is important that you continue to invest during these periods to optimise your returns.

These are some ways in which you can build a healthy portfolio for this financial year. Building a healthy portfolio is one of the aspects which contribute to your good health. You can also avail the help of financial experts Tata Capital Wealth who can help you with the entire process.

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