How To Manage Your Investment Portfolio The Right Way
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Managing your portfolio can be intimidating. But it’s crucial to making sure you meet your investment goals. Fortunately, with the right tools and strategies, it’s not that difficult. Here’s how you can manage your portfolio to set yourself up for financial success.
1. Get online access to your portfolio
The first step to managing your portfolio is to track it. Tracking your portfolio shows you how your investments are doing, if you’re on track to meeting your financial goals and if you need to take any action.
Some investors track their portfolios with spreadsheets. But this can be a bit of a hassle, as setting up the right template takes time. On top of that, you’d need to manually update your spreadsheets when your portfolio changes.
Alternatively, you can track your portfolio an online platform like Manulife iFUNDS, which helps you manage your Manulife unit trust, Regular Savings Plan (RSP) and Private Retirement Scheme (PRS) portfolios. This can be a more convenient way of tracking your portfolio, as there’s no setup needed – all the legwork has already been done for you. On top of that, having online access is useful, as you’d be able to see your portfolio at a glance through any internet-connected device, such as your smartphone or tablet.
2. Make regular contributions through dollar-cost averaging
Some investors decide when to invest based on whether they think the market will go up or down. But investing based on market predictions – an approach known as timing the market – can cause you to lose out on potential returns.
That’s because predicting the market is hard, even for professional investors. You’d have to take into account many factors, including company valuations, economic trends, interest rates, geopolitical events and more.
It can cause you to miss out on days when the market is recovering. For example, imagine that the market is moving on a downward trend. You expect it to fall further, so you withdraw RM10,000 from your portfolio. However, the market suddenly rises within a week, increasing by 20%. By not staying invested during that week, you would have lost RM2,000 in returns.
There’s another way to decide when and how much to invest, and that’s with dollar-cost averaging (DCA). With DCA, you invest a fixed amount of money at a fixed schedule (e.g. monthly or quarterly), regardless of how the market is performing. Here’s why it’s a great way to grow your portfolio:
- Compounding returns. By continuously investing into your portfolio, you’ll take advantage of compounding returns. This means that when your profits or dividends are continually invested, they too will generate their own profits, helping you grow your investment portfolio.
- Disciplined approach. Investing at a fixed schedule regardless of market conditions helps you avoid the temptation to time the market.
- Peace of mind. With DCA, you don’t have to worry about investing at the wrong time. Buying when prices are high and when prices are low means that over the long term, your investment costs will average out. You also won’t risk missing out on the best market days.
With Manulife iFUNDS, you can invest through a Regular Savings Plan – a monthly investment plan that is based on the principal of DCA – to grow your portfolio.
3. Asset allocation, diversification and rebalancing
Now that you know when to invest, how do you know what to invest in? Here are three things you need to pay attention to:
a) Asset allocation
This refers to the way your portfolio is divided into different asset classes such as stocks, bonds, cash and commodities. Your ideal asset allocation would depend on factors like your age, risk tolerance and time horizon until retirement. This helps you balance your portfolio against how much returns you want, and the risk you’re willing to take.
For example, if you are a 25-year-old investor, you may be able to take more risk, as you have more time to recover from market fluctuations. This could mean investing more in high-risk investments like equities, and less in low-risk investments like bonds.
b) Diversification
Diversification is making sure that your portfolio is made up of different investments. While having an asset allocation is a form of diversification, you should also diversify within asset classes. You could do this by investing in different geographic regions or industries.
This helps spread out your investment risk. Imagine if you had only invested in a single stock – if the price of that stock plunges, you would lose a big part of your portfolio! Instead, spreading this risk among many different investments means that the drop of a single stock (or even a single industry) won’t greatly affect your entire portfolio.
c) Rebalancing
As time goes by, the value of each asset class in your portfolio might change. For example, if stocks happen to do well during a certain year, the value of stocks in your portfolio might go up. This could increase the proportion of stocks (and the risk) of your portfolio.
Every once in a while – typically half-yearly or yearly – you’ll need to rebalance your portfolio. This means selling off or investing more in your portfolio so that the percentage of each asset class matches your ideal asset allocation again.
4. Seek expert advice
Financial markets can be complex. It’s not always easy to know if you’re making the right investment decision, or if you’re on track to meeting your financial goals.
When in doubt, it can be useful to seek advice from an expert. This can be in the form of a financial advisor, who can analyse your portfolio and help you figure out your next moves. You don’t have to meet an advisor in person, either. For example, Manulife iFUNDS digitally enables you to walk through your portfolio with an advisor virtually or in person.
But you don’t always have to engage an advisor to get expert advice. With Manulife iFUNDS, you’ll also get access to professional investing insights and data, so you can make more informed investment decisions.
Manage your portfolio with Manulife iFUNDS
If you’re looking for the right tools to make managing your portfolio a lot easier, consider Manulife iFUNDS. It’s an online fund investment platform that helps you manage your unit trust, RSP and PRS portfolios.
Here’s why you should consider using Manulife iFUNDS:
- Digital curation of funds. The platform screens for appropriate funds based on your investment and risk profile. Then, it allows you to review the selection by filtering the fund metrics that best meet your investment objectives.
- Perform transactions online. You can make your Manulife fund transactions (including subscription, top up and fund switching) online.
- Check your portfolio at a glance. Get up-to-date information on your Manulife portfolio, fund performance, asset allocation, transaction history and investment summaries.
Opening a new account is easy, and can be done entirely online. Here’s how:
Besides that, when you invest with Manulife iFUNDS today, you’ll also be taking advantage of these offers:
| Offer | Valid until |
|---|---|
| Earn up to RM200 in e-vouchers when you set up a Regular Savings Plan or when you make your first Private Retirement Scheme (PRS) fund subscription through Manulife iFUNDS | August 31, 2021 |
| Enjoy a reduced minimum investment amount to RM200 for all funds when you invest via Manulife iFUNDS | December 31, 2021 |
