Our purpose of investment is to earn good returns with minimum risk to reach our desired goal, hence one need to continuously monitor their investments & re balance whenever required. We will discuss when one need to take steps towards the change in his portfolio.

If our investment is subject to higher risk then there is lesser chance of reaching the desired goal at the desired time, so one must need to diversify his investment so that he can have higher returns with minimum risk.

Different Market Scenarios

When the investor learns to analyse his portfolio covering Risk, Returns, Liquidity & also the impact of market, he will be prudent enough taking wise investment decisions for his portfolio building.

Taking some of the market conditions into consideration lets analyse our investments measures to be taken.


ANALYSIS The difference in the return from investment can be calculated in the two scenarios before & after re balancing.An equity concentrated portfolio consist of higher volatility that leads to losses in Investment, so one need to diversify his/her portfolio in different sectors equity shall be part of investment but investment in debt shall also be included. Maintain correct asset allocation according to the needs.


Bearish market means a fall in prices,when an investors portfolio is concentrated just to equity & debt that leads to greater fall rather than a well diversified one consisting ( debt, equity, gold, real estate, cash) as it balance it self when one sector face a steep fall, the other might decline with a lower pace or might remain stable.

ANALYSIS – Considering various other options of investment rather than concentrating on limited avenues one should take up various other investment options to diversify risk and earn higher returns.


Inflation is an on going process of rise in prices with time, so one need to consider the inflation effect while building his portfolio, because when one ignores inflation then he shall not have the desired corpus for the specified goal. While deciding about the investment (time & corpus) one must instill the effect of inflation also, to reach the correct desired amount.

ANALYSIS The desired corpus can be calculated at the end of investment tenure with & with out considering inflation effect and the investor can self analyse that without considering inflation one can not have the desired corpus.


Investing not only require to consider the amount, time, returns, liquidity but one need to consider is the taxation effect on the returns earned from investment. People ignore this major factor of taxation which consumes a part of their return.


ANALYSIS So when an investor works for his financial goal he should take into account the tax effect on his investments to reach the desired corpus taking effect of post tax returns.


For carrying out any kind of work it involves (Time & Cost), putting in efforts for getting some thing in return requires time & to reach those returns involves COST. So investor must take into account the expenses to be done. While investing expenses such as exit loads, brokerage/commission, transaction cost & the newly introduced stamp duty on mutual fund purchase these cost are in smaller amount but on the overall investment it covers a larger portion.

ANALYSIS – Charges involved in investment eats up a portion of the invested amount if seen on cumulative basis, investor can evaluate the amount on a rough basis considering his/ her investment and thus calculate the amount to be invested & in correct interval of time.


Investment planning should be in such a way that for each  goal there is an specified investment which matures when the goal is approaching near, people fail to plan their money in this way that they have money when they require. They either go for loans or premature withdrawals of an investment which is subject to withdrawal charges. So proper planning for each goal is required to be done.

ANALYSIS – When one have clear idea about their financial goal and then he/she plans for investment accordingly considering the maturity period and the required corpus then one can plan for their investments in a proper way.

Investment planning is an important part of managing finances, which many people fails to do who ends up with no money or have loans on them, proper planning will help them to reach their desired goal with the required corpus.


Author Bio

Qualification: Graduate
Company: N/A
Location: AGRA, Uttar Pradesh, IN
Member Since: 24 Jul 2020 | Total Posts: 15
I have Cleared CA (intermediate) also cleared various series conducted by N.I.S.M (National Institute of Securities Market), Investment Advisory, Research Analyst, Merchant Banking & Retirement planning. Recently cleared exam of Independent Director conducted by IICA ( Indian Institute Of Corporate View Full Profile

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October 2020