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Summary: As Diwali approaches, most of us are busy cleaning our homes and clearing out clutter. But what about your portfolio? Have you given it the same attention? Here’s why a festive clean-up for your finances could matter just as much, and how to go about it.
It’s that time of the year again. Diwali’s just around the corner, and chances are your house is already in ‘declutter mode’. Old clothes? Gone. Broken gadgets? Out. Cupboards? Cleaned.
Now, pause for a moment. Have you ever given your finances the same festive treatment?
We spend hours scrubbing walls and polishing furniture, but when was the last time you dusted off your portfolio? This Diwali, why not extend the same cleaning ritual to your money?
But why bother?
Be honest, how many mutual funds are you holding right now? Five? Eight? Maybe more?
Most investors don’t start with a cluttered portfolio. But over the years, small decisions pile up:
- A mid-cap fund because a friend swore by it.
- Another flexi-cap fund ‘just in case’.
- A sectoral fund because it is rallying right now.
Before you know it, your portfolio looks like that messy storeroom everyone avoids.
And here’s the problem: a cluttered portfolio doesn’t make you wealthier. It just makes tracking harder, creates overlaps and hides duds that quietly drag down your portfolio’s returns.
So, how do you transform your portfolio from a mess into one that is streamlined and delivers? Below are the four simple steps you need to follow.
Step 1: Spot the underperformers
Think of this as throwing out cracked vases or broken chairs.
Open your portfolio and ask, “Which funds have really earned their place here? Look at their long-term track record (five-year and 10-year returns). If a fund has consistently lagged its peers and the benchmark, why keep it?
One bad year is fine since every fund has its ups and downs. But if underperformance has become a habit, you’re better off saying goodbye.
So here’s a quick check: Can you name the bottom two performers in your portfolio right now? If not, that’s exactly where you should start.
Step 2: Cut the clutter
Now, how many funds do you own that invest in the same stocks?
If you have three large-cap funds, two flexi-cap funds (which also have a heavy large-cap tilt) and maybe two funds of the same AMC, guess what, you’re just repackaging the same companies again and again. That’s not diversification, it’s duplication.
Suggested read: Is your mutual fund portfolio a mess?
For most investors, three to four equity funds and two to three debt funds are enough. The key is picking funds that do different jobs, say, a large-cap, a flexi-cap and a mid-cap fund. That way, you get real balance without unnecessary baggage and overlap.
Step 3: Rebalance the room
After a stock market rally, have equities taken up too much space in your portfolio? Or maybe fixed income is sitting heavier than you intended?
This is the equivalent of shifting furniture so your room feels balanced. If equity has swelled beyond your comfort zone, move some gains to debt. If debt is overweight, let equity take its share.
Don’t ignore this step. Asset allocation, which means maintaining the right mix of equity and debt, is what will keep your portfolio safe when the markets wobble.
So, ask yourself, “Does my current allocation match my risk appetite?” If not, maybe it’s time to rearrange.
Step 4: Make space for the new
Decluttering isn’t just about throwing things out. It’s also about making room for what really matters.
Once you’ve cleaned up your portfolio, you may find space for an international fund to gain global exposure, a hybrid fund that handles rebalancing automatically or a gold fund that helps cushion your portfolio when the markets are turbulent.
The key is not to rush to refill the shelf. Add only what fits your goals, not what everyone else is buying.
Light up your finances
The magic of Diwali cleaning isn’t just in spotless floors or shining cupboards; it’s in the lightness and clarity it brings. Your portfolio deserves the same.
By discarding duds, trimming overlaps and streamlining SIPs (systematic investment plans), you give your investments room to breathe. And when things are simpler, you’ll actually enjoy watching your wealth grow.
This Diwali, as you light up your home, take a moment to brighten your finances too. Because uncluttered money, like a well-kept home, always shines brighter.
Safety first, growth always
Good investing isn’t just about chasing returns; it’s about building a foundation strong enough to handle surprises. That means having the right funds, in the right proportion, with no clutter.
With Value Research Fund Advisor, you’ll know exactly which funds deserve space in your portfolio, and which ones are just dead weight. We help you streamline, rebalance and grow, so your wealth shines brighter every year.
Also read: Keep your portfolio in perfect balance
This article was originally published on October 20, 2025.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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