Crucial Facts on Monitoring Your Investment Portfolio
Chances are that any time an investment portfolio comes up in the news or gets mentioned you are perturbed. However, since investing is not a short term affair, it needs time. Due to the top technology we have today, most investors are always keeping a close eye on how their investment is doing. Monitoring investments is worth the effort.
It is not very easy to time a market, whether you are a professional investor or not. Do-it-yourself investors are the most affected considering they do not have tested and clear cut strategies in place. It is even harder considering some seasonal stocks have a way of performing much better at certain months of the year, especially in May Day and Halloween when returns seem higher. Each of these factors needs to be considered.
Once you have researched the companies to invest in and understood them well, you might want to try out the buy and hold approach that’s usually the best method of most investors who are dedicated. It is also important to ensure you have picked the best time to invest to see it paying off well, while holding on can also bring in the same result. For instance, an investment of £100 in 2003 when the markets were very low within the growth investment sector of the UK returned £400 ten years later showing how timing is important. Time is also critical in investments; for instance, a £100 investment in 1999 within the UK growth sector brought in £275 by 2013, May.
To monitor the performance of your portfolio for those using good investment platforms you need to have the power to log in occasionally and see the performance of the investment. An alert on shares can be set once they have reached a specific price or simply messages on an entire portfolio’s performance. Financial analysts believe investors need to review every portfolio they own annually or after every two years. Monitoring a portfolio so often is not that important, especially if the investment is a long term one. A good intermediary or provider will keep updating you in case there is change in an investment so that ad-hoc changes can be made occasionally if the need be.
Do not forget a good time for portfolio review is either at the beginning or end of the tax year, a time when every investor is concerned about pension allowances and Isa. Receiving a statement on an investment is very important a number of times each year, which acts as a very effective prompt.
Remember investing in a long term investment is the main goal, but forgetting about the portfolio is a foolish move. Share or fund that collapses or closes will drag a portfolio down, meaning that keeping a close eye on the investment’s performance while assessing it occasionally against the goals in place is quite important. Fund ratings can be used and researched towards assessing a portfolio. Funds persistently performing badly, for example, are occasionally highlighted by Best Invest or the 150 Wealth list of best funds to outperform by Hargreaves Lansdown.