Published: 24th Aug 2024
By: Value Research
If you invest all your money in a single fund, your chances of wiping out your wealth are much higher than if you spread it out across multiple funds.
Investors follow this logic blindly believing that more funds means better risk management. But little do they know that having too many funds can make tracking them a nightmare.
We offer a simple remedy for this that consists of two easy steps.
You can start by churning the long-term laggers. Identify them by evaluating each fund’s long-term performance against its category average and benchmark.
You can exit investments which have low allocation. An allocation of at least 5% should be meaningful. So, you can sell funds that make up less than that.