Clean your portfolio, it will lead to a clean portfolio

New Year, new resolution. Start a new habit. Cleaning, yes, cleaning your portfolio of all the junk you have accumulated over the years. I think it’s high time to take our Prime Minister more seriously with regards to keeping things around us clean. We must have bought many insurance policies, ULIP’s or even ELSS schemes for tax saving purposes, which were sold to you by your friendly neighbourhood agent or your bank manager. They met their targets by doing the selling, have you met yours? You might also be having some Post office MIS, or RD or NSC or KVP, yes I’m reminding you of all the possible money you might be having around.  Oh! I should not forget, different bonds, FD’s and NCD’s from Companies or some deep discount bonds.

Hey, the list is getting long, Equity shares which you purchased based on tips, recommendations from friends, TV or even Newspapers. Even Shares purchased during the IPO boom. Hopefully last, mutual funds purchased during NFO’s, sold to saying cheap at NAV of Rs.10 only. This sounds more like peddling on the roads.  I might have missed some other financial instruments. We have just been saving, with the assumption that we have been investing. There was no plan in place, hence such a vast portfolio. Wake up, make a list of all of them and start cleaning them up.

How? Simple, make a list of all your financial savings, with type, company, maturity date, Nomination done, current value and maturity value. If nomination done, who and if not done, do it now. There are many websites where you could just feed this data and you could get a report and have a look at it from time to time. Check how many of these are in Physical form, try to get them into electronic form, it’s easier as well as safer to sell or redeem. This will also give you an idea of when premiums have to be paid and you could keep the cash ready, instead of running around to get your finances ready, when you receive the notice. Sometimes you do not receive a notice or your agent forgets to inform you, then what? You end up paying a penalty, for your own negligence.

Now that you have everything in place, review the list and check what is needed as per your goals and what is not. Check if they are giving you good returns. Get rid of the unwanted and loss making. Don’t get emotional, that you have made a loss, better to have cash in hand than to have duds in your portfolio. This is the reason for cleanup (You see this on Mumbai Municipality garbage clearing trucks) or garbage clearance. Review your list regularly. If you need help, let us know, we are ever willing to help.