Why You Should Review Your Portfolio Every Year
Most investors set up SIPs and forget. But your life changes — income goes up, goals shift, risk appetite changes. A portfolio built at 25 may be dangerously aggressive at 35.
Here's exactly what to check in your annual review:
1. Check Your Asset Allocation First
Your asset allocation — the split between equity, debt, gold, and cash — is the biggest driver of your portfolio's risk and return.
Rule of thumb: Equity % = 100 minus your age. At 30, you should have roughly 70% equity and 30% debt.
If your equity is above 90% and you're over 40, that's a red flag.
2. Count Your Funds
More than 6 mutual funds is almost always over-diversification. Many funds hold the same top stocks (Reliance, HDFC Bank, Infosys). You're not diversifying — you're just paying more expense ratios.
Ideal portfolio: 2–4 funds for most people.
3. Check for Duplicate Funds
Open any two large-cap funds side by side. The top 10 holdings are often 80% identical. You're paying two expense ratios for essentially the same exposure.
Common duplicates to check:
- Mirae Asset Large Cap + Axis Bluechip
- HDFC Top 100 + ICICI Pru Bluechip
- Any two Nifty 50 index funds
4. Is There Any Debt Allocation?
Debt mutual funds, liquid funds, or FDs provide stability during market crashes. Without debt, a 40% market crash (like March 2020) would hit your entire portfolio.
If you have zero debt and you're not in your 20s, add at least 20% debt.
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