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Prudent financial planning involves listing down the financial priorities and then steadily working towards achieving the financial goals in the desired time frame. While you may have already taken your first step towards investing towards a healthy financial future by registering a Systematic Investment Plan (SIP), it is equally important to review the investment periodically. The performance review of the investment portfolio would allow you to align your financial priorities and financial goals.

<p dir="ltr">When we talk of a Systematic Investment Plan (SIP), one of its most talked-about benefits is the&nbsp;<a href="https://www.utimf.com/articles/all-about-sip">rupee cost averaging</a>.&nbsp;It is an investment phenomenon of averaging the cost of investments, which happens when the investors make regular investments periodically.&nbsp;</p>

It is said, "If you don't know where you're going, any road will take you there." Just like you must know your destination before you start your journey, you must determine the financial goal before you start investing. You must have a specific financial goal in sight. Be it saving for your child's education, buying a new house or saving for your retirement, linking your investments with your financial goals help you accomplish your goal in a better way. 

“Mutual fund investments are subject to market risks.” While the market risk in mutual funds is inevitable, the fund management team can mitigate it to a certain extent, with adequate research and analysis. Based on their risk tolerance ability, an investor may be classified as an aggressive investor, moderate investor, or a conservative investor. This article aims to discuss how to evaluate the risk profile of an investor, including various factors that affect it.  

While Indians have historically been investing in physical assets like gold, real estate, etc., the millennials are reflecting an increasing preference towards investing in financial assets. Mutual funds are steadily emerging as a preferred investment option, as also being reflected by steady monthly SIP inflows (Source – Association of Mutual Funds in India, AMFI). 

Systematic Investment Plan (SIP) allows you to invest a fixed amount into mutual fund schemes on a pre-determined periodic frequency. You can instruct the bank to auto-debit the from your account specified dates and invest in the pre-specified mutual fund scheme. This investment cycle happens automatically on a recurring basis irrespective of the market condition. This helps an individual to consistently move towards creating an investment corpus and take a step closer to achieve his/ her financial goals. 

Monthly SIP inflows in mutual fund have managed to remain steady even during the recent volatile market condition. However, experts recommend that if such volatility and correction persist longer in the equity markets, it will have a significant impact on the investors. 2019 has been the year where investment in debt funds and Gold have generated better returns for the investors than the equities.

Just as it is important to start investing early, it is paramount to review your portfolio periodically. Regular assessment allows you to review the performance of the various funds and accomplish your financial goals. Here are four crucial parameters against which you may compare your mutual fund portfolio

<p dir="ltr"><span id="docs-internal-guid-073bb9ec-7fff-2b00-5718-87135ee2dd3a">Equity funds are those funds, which invest predominantly in equity and equity-related securities. Such investment exposures can include investments in equity shares of companies, or related derivatives with underlying equity shares.

When we discuss mutual funds, we come across the standard warning when, “mutual fund investments are subject to market risks.” However, such risks can be classified into two categories – systematic risks and unsystematic risks. Systematic risks arise because of macroeconomic changes in the domestic and global economy. Such changes can include economic growth, fiscal deficit, current account deficit, forex movements, etc.