Tuesday, October 04, 2022

You have underperforming stocks or mutual funds in your portfolio - here's what to do

"Viresh, I have 2 funds which I have invested since 2 years and it is underperforming. I am thinking to sell them" - said a client at early stage of engagement.

Do you agree that there will always be some portfion of your portfolio which will be underperforming ?

Do you have such funds and shares?

Here's the secret to 'Once I sell they go up'- there should and will never be all performing in any portfolio,infact there should be mix of less performing and good performing investments, or at times even negative performing stocks and funds in the overall investment basket/portfolio, otherwise the portfolio is generally not risk adjusted.

So create a portfolio with a strategy in place.

Agree ?
How does your portfolio look like?
I hold about 3 funds which are currently giving neutral returns and about 2 stocks which are hugely underperforming.

Shareing performance stories is fad, very few investors talk publicly or in conversations about failuers and under performance.

Underperformance, should not be the only criteria to sell and not hold or add.Find reasons and suitability within your overall portfolio asset allocation.

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