Part 5: Process or How the heck do I Invest in Equity Successfully?

5.14 Manage your portfolio using a multi-asset Portfolio Manager

Do you have the proper tool to manage your portfolio, take better decisions to reach your goals? Is the information of all your assets in one place? What must your Portfolio Manager have or enable you to do so that it is as useful as the dashboard in an aircraft? What risk do you carry in your portfolio?

Managing is a strange word, at least in India. When someone is going through a tough situation and you ask ‘how are you doing?’ chances are you will get ‘I am managing’ as an answer. When someone tells you something can’t be done, its common place to ask them to ‘somehow you manage it’, I really don’t know what that means. But when a government official say ‘yeh nahi ho sakta’ and the answer to it is ‘aap jaara manage kar do’ then we all know what has been said by both parties. Hopefully things are changing.

There is a chance that when you hear ‘Manage your portfolio’ you may not know exactly what you are supposed to do. I have had the opportunity to work as a Consultant and Trainer with many good, market-leading companies and one of the common challenges they face is that their managers, especially Sales Managers don’t know exactly what is it that they are supposed to do that is different than what they did or their colleagues do as a salesperson. And everyone enjoys a good laugh when a Sales Manager is called a Sales Damager. I think there is some truth in this innocuous sounding connection.

You have seen the Investing Process and the System you need to make informed decisions. All the decisions you make come together in your portfolio. Now, you need something to help you make informed decisions at a portfolio level. Most portfolio trackers are designed and used as ‘report cards’-how well you have done and where you screwed up. Instead, you need to look at your portfolio like a pilot look at the aircraft dashboard-a sophisticated device that helps him navigate and stay on course to reach his destination.

Brokers have a record of all the stocks that you have bought and sold usually under Transaction and what you currently own under Portfolio or Holding. They show what you own, how much, the average price you paid for it, the current market prices and the gain or loss that you have on each stock or mutual fund and on the portfolio. This is the classic ‘report card’ portfolio tracker. Some brokers provide you with an analysis of your portfolio and this is helpful but not enough to help you navigate your way to your goals.

What does it mean to make informed decisions at a portfolio level and how do you navigate your investing to reach your goals? You have seen the fundamentals...........Read More

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