A SIGNIFICANT part of the mutual fund investment process involves tracking the performance of the various funds. In many cases, apart from the funds where the investment has taken place, it is also necessary to track how some other funds are doing because they might represent future investment choice for the investor.
This will help the investor to keep a close watch on their investment portfolio and will also throw up areas where some changes need to be made. While tracking the fund performance, there is a need to keep the following factors in mind.
Time period: The time period after which the fund performance is tracked has an impact on the effectiveness of the entire process. A daily tracking of the situation might not help because over a period of time this will lead to a situation where the overall position looks confusing because there will be short-term movements in either direction. On the other hand, if a fund is taken into the portfolio and then forgotten, then this will also not be a very good sign. It can lead to a position where significant changes might not come to attention. This is the reason why there has to be a reasonable time gap after which the performance can be tracked. A period of one month or even three months is the generally adopted time when such an activity is undertaken.
Areas to track: The time decided for the purpose of tracking will lead to another question which is the area that has to be tracked.
This point will answer several questions and, hence, deciding on this issue is a very important thing for the individual. One of the things that have to be tracked is the kind of gains or losses that are running up in the investment. This depends upon the time of investment and the manner in which the fund has been performing after the investment. This will not give a complete picture so something more is required. When it comes to mutual funds then it can be the portfolio of the fund or other indicators like ratios that measure risk so that it presents a better picture for the investor.
Availability of details: Another thing that has to be kept in mind is that the tracking has to have synchronisation with the availability of new details emerging from the mutual fund. This is the only way in which the tracking can be made effective as there will be new information that can be processed and hence acted upon where necessary. For example, it makes no sense to keep
looking at the portfolio of the fund on a weekly basis when the fund is actually releasing the changes in portfolio on the monthly basis. If the weekly tracking is done then no change will be visible for a lot of weeks and then nothing needs to be reviewed.
Other details: It is not just the portfolio and the changes in the value of the fund that actually need tracking because there are a lot of the other areas that might be important for the individual.
This happens as other conditions related to the fund like the manner of charging of the exit load or even the period when there is a lock in on the fund can have changed.
When this happens then the consequent decisions of the individual will also change and looking at these areas is essential to keep things in proper balance while making various decisions. Apart from all this it is also vital that all the information gathered is then acted upon.
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Also, know how to buy mutual funds online:
1) DSP BlackRock Mutual Funds:
http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html
2) Reliance Mutual Funds:
http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html
3) Birla Sunlife Mutual Funds:
http://prajnacapital.blogspot.com/2011/06/buying-birla-sunlife-mutual-funds.html
4) UTI Mutual Funds:
http://prajnacapital.blogspot.com/2011/06/buying-uti-mutual-funds-online.html
5) SBI Mutual Funds:
http://prajnacapital.blogspot.com/2011/06/buying-sbi-mutual-funds-online.html
6) Edelweiss Mutual Funds:
http://prajnacapital.blogspot.com/2011/06/buying-edelweiss-mutual-funds-online.html
7) IDFC Mutual Funds:
http://prajnacapital.blogspot.com/2011/06/buying-idfc-mutual-funds-online.html
