These New Year resolutions will boost your investment portfolio

Assess your asset allocation as well as net worth, diversify, manage risk and start investing now

- DEVINA MEHRA

New Year season is over, and by now, you may have already fallen behind on some of your resolutions. I'm going to offer some simple ones, which you can get done while your enthusiasm is high and the New Year is young—resolutions that don't require you to grit your teeth and exercise will power for 365 days. Most can be finished this weekend, but would give a lifetime boost to your portfolio.

First of all, let us look at asset allocation. Now, it sounds like a fancy phrase, but it's actually quite simple. It's the categorization of where your investments presently are.

For example, equity. That includes directly held shares, equity mutual funds, portfolio management service (PMS) schemes, and others.

Then there is fixed income, where you have fixed deposits, fixed-income mutual funds of various kinds, and bonds. Of course, not all of them have the same risk profile.

Next is real estate—land, house, apartment, etc. Plus commercial real estate, if you have any. In addition, there are other categories like gold and other precious metals, or even cryptocurrency or other alternate assets like art.

Look at what you own and any loans that you have outstanding, let us say against your house or car. Basically, take a good look at what you own versus the loans you have. The net of the two amounts is your net worth. It is positive if the former is higher.