Skip to main content

Track performance make the best use of Mutual Fund Investment

 

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.
 

-----------------------------------------------------------------

 

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

 

Popular posts from this blog

Gold: What Can Trigger the Inevitable?

A stronger dollar or rising interest rates could derail the epic yellow metal mania   Before you sell that last piece of jewellery, keep in mind that the gold price will not go up indefinitely. There are number of reasons why it might crash. If you're over weighted in gold or commodities, the warning is the same: A stronger dollar, strengthening US economy or rising interest rates could derail the epic yellow metal mania. Who knows? Congress could even reach an agreement to clear up its balance sheet and pay down its debt. What are the chances of any of this happening? It's beyond the limits of my minuscule, clouded crystal ball, which is about the size of a pin-head.   Nevertheless, you should prepare your portfolio for any number of eventualities, which can be easily accomplished with exchange-traded funds. Gold is troublesome in my book because it really isn't an investment. It's a reserve currency of sorts that's heavily traded by institutional investor...
Read more

What is Statutory Liquidity Ratio - SLR?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 What is Statutory Liquidity Ratio - SLR ?   Last week, the RBI cut statutory liquidity ratio ( SLR ) by half a percentage point to 22.5%, effective June 14. By this, the central bank intends to release additional money into the banking system. SLR is the amount of funds that every commercial bank should have either through its holdings in government approved bonds and securities, gold or a combination of these assets. This is another way of ensuring enough liquidity for each bank before they lend to customers. By reducing SLR, the RBI released another half a percentage point of commercial banks' total deposits (in banking parlance, total demand and time liabilities that include FDs, savings and current accounts) to be free ...
Read more

7 Things You Should Look for in a Financial Planner

Recently, a new breed of professionals has emerged who are making financial plans for everyone and are not restricting themselves to investment planning. A financial plan includes planning for your taxes, retirement, kids' education and marriage, buying a home, estate planning or any other goals you may have. This new breed of professionals, known as financial planners, writes a plan for you with all your goals specifically laid down and then provides you with a road map on how to achieve these goals. They always give you a holistic account of all your finances, taking into account all your assets and liabilities, besides taking care of all the risks associated with you and your family and also the assets owned by you. These financial planners will first collect all the data related to your finances and the goals you have for future. These goals may be anything ranging from buying a home, to planning for your child's education to going on a vacation. After this exercise of d...
Read more

Market Pre-open session - How It works and Its benefits

   With an intention to reduce volatility in various scrips at the opening of the markets, and to arrive at the ideal opening price of a scrip, the exchanges have introduced a call auction process in the pre-open session from October 18.    The pre-open session is a new innovation to arrive at the ideal opening price of a scrip for the current trading session. The session intends to reduce volatility in the beginning of a day. Under this new arrangement, an exchange will collect orders for the first few minutes of this session. On the basis of orders received, it will arrive at the opening price and match the tradable orders to that price. The remaining orders will be moved to the normal trading session.    The call auction process will be initially introduced for scrips forming part of Nifty and Sensex, and trading in other scrips and F&O contracts will only begin at 9:15 am when normal market trading begins. Orders not will get traded during the order entry period in the pre-...
Read more

ASBA Option for Initial Public Offer (IPO)

IPO (initial public offering) applicants, particularly the unsuccessful ones, often have to face a double whammy of sorts. On the one hand they fail to get allotment of shares and on the other, they lose out on the interest during the period their money is locked —that is, if they have opted for the traditional method of issuing cheques for depositing the application money. However, if they choose the ASBA (Application Supported by Blocked Amount) facility, they can circumvent this problem. But do note that you cannot decide to make two applications – one by way of cheque payment and the other through ASBA. If you do so, it could be rejected on the grounds that it constitutes multiple applications. Introduced by Securities and Exchange Board of India ( Sebi ) in 2008, using ASBA has become mandatory for all non-retail investors. Retail investors, though, continue to have the option of choosing between the old and new mechanisms. However, it is in your interest to opt for ASBA. He...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now