Direct more money to largecaps as small, midcaps outperform

Rebalancing by allocating more to an underperformer will help avoid tax liabilities

- BINDISHA SARANG

Financial experts recommend reviewing your financial portfolio annually. December is a good time to carry out this task so that you can hit the ground running at the start of the new year.

Adhil Shetty, chief executive officer (CEO), Bankbazaar says, "A periodic review allows for necessary adjustments, be it portfolio rebalancing, changing asset allocation, or setting new financial targets. Such fine-tuning is essential to get optimal returns in line with one's financial aspirations."

Check progress against goals

Begin the review by assessing whether your portfolios are on track to achieve your life goals. Jay Thacker, member of the Association of Registered Investment Advisors (ARIA), says, "Check for progress towards specific milestones and adjust your strategies if required." If, as a result of market developments, it appears that a portfolio may not reach the targeted amount, invest more.

Next, revisit your goals. Deepali Sen, founder and partner, Srujan Financial Advisers, says: "Reviewing your goals annually allows you to identify new goals that may have emerged and drop older ones that have become irrelevant."

Allocation out of sync?