The Importance of Managing Your Portfolio
Updated: May 9, 2022
For many people with sizable savings or a lot of disposable income, choosing to invest it is a smart decision. This is also often recommended by financial professionals as the best way to overcome inflation rates and achieve financial freedom.
However, we often take this for granted and may not track or manage our portfolios as actively as we should.
This lack of financial planning is either due to being time-poor or a decision to simply trust in the platform we’ve opted for instead of expending effort monitoring it.
In an ideal world, our financial advisers are trusted to ensure that our portfolios are rebalanced frequently to meet our changing financial goals. But this is not the reality for most.
This is why taking some time to check on portfolios and assets is important. You should do this either biweekly—or, at the very least, monthly—to ensure that you’re on your way to achieving the financial freedom that you desire.
The aim of every individual is to meet their financial obligations in the short, medium, and long term, after all. The way to fulfill this would be through managing your portfolio wisely, thereby securing your future.
The Significance of Portfolio Management
There are several clear reasons managing your portfolio is vital if you want to get decent returns on investments.
Let's go over the most important ones right now:
1. Allocation of Funds for Maximum Returns
Portfolio management is done to see if the portfolio is on track to achieving your current financial goals. You want to check if your financial planning is aligned with your desired returns and risk profile.
By actively managing your portfolio, you can adjust when needed and revise your direction as necessary.
This lets you maximise your returns on your hard-earned money.
2. Reducing Risk
One of the most important reasons to manage your portfolio is to reduce your risk.
The types of investments you choose to enter can be chosen based on your risk tolerance and profile. That also means you can match your financial habits to your financial goals and disposable income.
Again, this minimises the odds of something going wrong with your financial planning.
Having a balanced portfolio can only be achieved by managing it actively enough to ensure diversification. This refers to the allocation of funds into different types of financial instruments.
Diversification is one of the best ways to protect your investment portfolio by ensuring you don’t have all your eggs in one basket.
If one of your investments goes belly-up, then, you won’t be seeing a total loss. Chances are the other investments are still fine, so you won’t have to suffer too bad a setback.
4. Managing Adverse Conditions
As the state of the economy changes (as we’ve seen over the last year especially), changes to the stock market tend to be rapid and drastic. That’s because it fluctuates according to the market demand and supply.
This is why managing your portfolio is important. It lets you keep yourself up to date with the latest profitable investment options.
Because the market changes, your investment portfolio may have to change as well at critical junctures. For instance, it’s perfectly possible to have to rebalance a portfolio regularly, diversify your portfolio further, or even sell off investments to prevent losses.
The Need for Protection of Your Future
As you can see, there are many strong reasons to do portfolio management.
It’s important to see that it’s not just about your investments. Along with managing your investment portfolio, financial planning is a holistic process of reviewing your protection and insurance coverage as well.
It may also involve optimising your retirement planning.
A person’s financial situation changes over time, either through a change of jobs, promotion, or even significant life events such as getting married or having a child. It is important to review your ever-changing financial goals and needs due to this.
For example, as a single individual, your priority may just be on building your wealth.
However, if you have a child or a dependent, the importance of having life insurance is even more pronounced. you’re no longer just responsible for yourself but for your family as well.
In either case, you’re trying to protect the future you see for yourself and those important to you.
Managing Your Portfolio and Protection Needs at a Glance
Knowing the importance of managing one’s portfolio and protection needs, we created an app where you can view all this information at a glance.
It allows you to enter different insurance or investment details. This then permits you to get an easy-to-read summary of your coverage or assets on a separate tab. You can even export this summary in a consolidated sheet if you’d like!
Moreover, it gives you the option to chat directly with a financial advisor through the app. You can get speedy responses based on your needs.
Using a single interface, you can basically review things like your coverage, manage your portfolio, and tap into a ready source of financial advice and guidance as needed.
A Last Word on Managing Your Portfolio
In sum, managing your portfolio and protection is absolutely crucial if you want to be truly prepared for whatever the future may bring.
It allows you to allocate assets dynamically and adapt to rapidly shifting times instead of being outpaced by them.
With tools like our app, you can make this monitoring and management process simple instead of a tedious task.
If you want to learn more about financial management and future protection, don’t be afraid to contact us. We’ll connect you to a financial advisor who can take you through everything you need to know!