COURSE CORRECTION

A thorough portfolio review is essential to replace underperforming elements and revitalize growth

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As 2023 began twelve months ago, the world was staring at uncertainties marked by inflationary pressures, geopolitical instability, and apprehensions about the impact of generative AI. The prevailing market sentiment anticipated a potential recession, albeit a soft landing, in the United States during the latter half of 2023, and the consequential ripple effects were expected to impact the global landscape. Contrary to experts’ predictions, the year unfolded unexpectedly as equities, especially in India’s mid- and small-cap sectors, thrived, defying the prevailing consensus about a challenging market environment.

Not everything unfolds as expected, especially in the realm of investments. Therefore, if you have a portfolio of investments that is based on predetermined goals identified during the financial planning exercise, it is imperative to evaluate the portfolio annually, at the bare minimum, if not more frequently.

Portfolio review allows for necessary adjustments to be promptly made, necessitated by expected and unexpected events impacting goals or changes in rules, regulations, or even alterations in risk profile. This ensures that the portfolio is positioned to meet the predefined end objectives.

It also brings to light any deviations, prompting necessary actions to realign the portfolio with the intended objectives. In addition to this, it serves as reassurance to investors that their investments are heading in the right direction, facilitating the achievement of long-term goals.