InvestorQ : What factors to consider when you monitor your investment portfolio?
Abhi Yadav made post

What factors to consider when you monitor your investment portfolio?

Mahil Khan answered.
3 years ago
Monitoring from a Long-Term Investor’s perspective can be slightly different from your trading position. However, we need to look at more of macro factors in this case:
Am I overexposed to a particular sector? You may have been buying stocks of the tech sector at lower levels and you suddenly realize that at some point you are just too exposed to a particular sector or theme. This has two risks. Firstly, your portfolio becomes too cyclical. Secondly, your exposure to other sectors and stories would have relatively gone down.
Am I overexposed to a particular business group? This is a precautionary measure and may not be applicable to very large groups. For example, if you own large-cap stocks like Grasim, Ultratech and Hindalco then you are exposed to the Birla group at multiple levels. This becomes a risk when the exposure to smaller groups becomes a risk as we saw in the case of groups like Amtek Group, Bhushan Group etc.
How are interest-rates likely to move and how will it impact my holdings? Interest rates not only impact your bond portfolio but also your equity portfolio. Lower rates of interest are conducive to growth in equity valuation and vice versa. This surely has a bearing on the value of your stocks.
Is my portfolio too much tilted towards cyclical? These cyclical moves in long-term time cycles of 10-15 years. Copper, aluminum and gold are classic examples. If you get caught in the wrong side of the cycle then you have to be prepared for underperformance for a very long time.
Should I exit, hold on or average my loss-making positions? Ideally, averaging is not recommended unless you are doubly sure. Averaging is like being wrong twice. When you buy a stock and the stock price goes down you are already wrong. Why to compound it by averaging the position?
Should I keep liquidity available to capitalize on IPO opportunities? Well, it is not just about IPOs but also about getting quality stocks at lower levels. You must have a valuation-driven to create liquidity in a gradual manner.