Last Updated on October 26, 2021 at 7:39 am
Arjun asks, “Can you please write an article on how new mutual fund investors should track their portfolios?” Today “tracking” an investment portfolio has become extremely easy. Investors are spoilt for choice and, at the same time, swayed by fancy pie charts and textured graphs. But is this tracking? In this article, let us consider what aspects of a portfolio an investor (new or old) should track and how often.
Finding out how much the funds in a portfolio have gained or lost daily/weekly/monthly, or even yearly is not tracking. It is watching. Being a spectator to portfolio ups and downs is simply a waste of time. Unless we have a clear investment strategy watching the portfolio does not help.
Step to follow before tracking an investment portfolio
Most new MF investors start investing without a realistic perception of the risk and reward involved. They also do not appreciate how much they should invest for their future needs, how to select mutual funds for different needs etc. So after you start investing, leave it alone and start studying your needs first.
Why am I investing? When do I need the money? Am I prepared to handle emergencies en route on the investment journey? This free ebook would help young earners build a simple financial plan with safeguards with Step by step instructions: Re-assemble Step by step money management basics.
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! 🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥
Once you have a robust framework to manage money, you need not stop your monthly investments each time there is an emergency. You know how to define a financial goal, set an asset allocation for it and start investing. This is your foundation, and it needs to be strong. Mutual fund tracking can wait! You can now tag your current MF investments, EPF, PPF, RD, FD etc., to different short-term and long-term goals (the above ebook will help with this).
The Next Step is to understand SIP stands for a systematic investment plan. This means you have a system of investment in place. Buying mutual fund units on the same day of the month is not a SIP. It is merely blind automation.
So our aim should be to learn about mutual fund basics with an investment system in mind. This free ebook can be a possible starting point: Mutual Fund FAQ 100 essential Q &A for new investors!
Next, I would recommend new mutual fund investors appreciate mutual fund risk. The mutual fund industry likes to sell dreams. It tries to convince investors that stock market volatility will reduce over the long term; A mutual fund SIP will average volatility.
Their aim is simple: the longer you stay invested, and the more you invest, the more they would earn. Remember our gains are notional while their income (management fee and commission deducted daily is real!). So they are unlikely to paint a realistic picture about MF risks. We need to do that ourselves.
Here are some resources to get started:
- Does long-term equity SIP investing work? (106-year analysis)
- How the fate of your mutual fund SIPs is decided by “timing luck.”
- Mutual Fund SIPs Do Not Reduce Risk! Beware of Misinformation
- Do not expect returns from mutual fund SIPs! Do this instead!
With a better appreciation of (equity) mutual fund risks, I would recommend replanning your financial goals with lower return expectations. Let us take stock:
- You have financial goals – long-term (above 10Y) and short term (below 10Y – until you have more experience)
- You are investing in equity mutual funds only for long term goals (more experience is needed to use any mutual fund for short term goals)
- You have an asset allocation in mind and hope to reach here anytime immediately to within the next few years. For example, 50% equity mutual funds and 50% fixed income (EPF, PPF, NPS debt options etc.)
- You have reasonable expectations of returns and realistic expectations of inflation.
- You know how much to invest for your long term goals based on this asset allocation and return and inflation expectation.
- If you can able invest this much, you have a goal to get there asap.
- Now and only now, you are ready to track your portfolio.
How to track an investment portfolio
You only need to look at your portfolio once a year, and when you do, the following actions are recommended.
Tools necessary
- A good hobby to prevent you from watching your portfolio frequently
- A simple DIY spreadsheet. Nothing beats the flexibility of this.
- Data from your investment portal or CAMS-KARVY consolidated account statement.
We have two free resources for tracking:
- Features of the freefincal mutual fund and financial goal tracker. I use this for tracking my funds. It still works, but I do not actively maintain it. You can change it as per your needs.
- Google spreadsheet portfolio tracker for stocks and mutual funds This was developed by freefincal readers but is also not actively maintained.
Information necessary
- The current value of equity component and fixed income component for each long term goal.
- From the above, compute your current asset allocation.
- Is your current asset allocation in line with your expected allocation? If yes, nothing needs to be done. If not, a rebalance will be necessary.
- Returns of each mutual fund
- If you are investing in index funds, you don’t need to worry about performance.
If you are investing in active funds, you will have to decide what to do about each fund. See for example: Review your mutual funds in three simple steps! - Holding too many mutual funds? Easily trim your portfolio with these simple steps.
- Want to build an equity mutual fund portfolio? Try these simple steps!
- If you are investing in index funds, you don’t need to worry about performance.
- What is your current portfolio worth for each goal? That is if you redeem all your money today, what can you do with it? For example, at the start of your investment journey, your corpus will be small. If you redeem it, you may be able to live off it for six months or 12 months. With time this duration will grow.
- Information like CAGR, XIRR or absolute gain is of little practical use.
More sophisticated steps like varying asset allocation progressively, graphical representation of current portfolio value vs expected portfolio etc., are possible. More on this later.
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
![Follow Freefincal on Google News Follow Freefincal on Google News](https://freefincal.com/wp-content/uploads/2023/07/Follow-Freefincal-on-Google-News.jpg)
![Subscribe to the freefincal Youtube Channel Subscribe to the freefincal Youtube Channel. Subscribe button courtesy: Vecteezy.](https://freefincal.com/wp-content/uploads/2023/07/Subscribe-to-the-freefincal-Youtube-Channel.jpg)
![Follow freefincal on WhatsApp Channel Follow freefincal on WhatsApp Channel](https://freefincal.com/wp-content/uploads/2023/09/Follow-freefincal-on-WhatsApp-Channel-300x83.jpg)
![Listen to the Lets Get Rich with Pattu Podcast Listen to the Lets Get Rich with Pattu Podcast](https://freefincal.com/wp-content/uploads/2023/07/Listen-to-the-Lets-Get-Rich-with-Pattu-Podcast.jpg)
![Lets Get RICH With PATTU podcast on YouTube Lets Get RICH With PATTU podcast on YouTube](https://freefincal.com/wp-content/uploads/2023/08/Lets-Get-RICH-With-PATTU-podcast-on-YouTube-644x362.jpg)
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
About The Author
![Pattabiraman editor freefincal](https://freefincal.com/wp-content/uploads/2019/11/Pattabiraman-author-freefincal-article-bottom.jpg)
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
![Both boy and girl version covers of Chinchu gets a superpower](https://freefincal.com/wp-content/uploads/2021/02/Article-bottom-Chinchu-gets-a-superpower-front-cover-for-girls-and-boys.jpg)
![Feedback from a young reader after reading Chinchu gets a Superpower (small version)](https://freefincal.com/wp-content/uploads/2021/02/For-bottom-Feedback-from-a-young-reader-after-reading-Chinchu-gets-a-superpower.jpg)
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
![You can be rich too with goal based investing](https://freefincal.com/wp-content/uploads/2016/11/You-can-be-rich-243x300.jpg)
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
![Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you want](https://freefincal.com/wp-content/uploads/2017/05/2-mini-Cover-pink.jpg)
Your Ultimate Guide to Travel
![Travel-Training-Kit-Cover-new](https://freefincal.com/wp-content/uploads/2019/11/Travel-Training-Kit-Cover-new.jpg)