A complete guide to monitoring your stock portfolio

A complete guide to monitoring your stock portfolio

Long gone are the days when you as an investor could buy a stock and forget only to check it after years to see the total returns. One of the main reasons for this behaviour was the unavailability of information easily. In today’s digital world, tracking your investments in the stock market regularly to ensure that your investment strategy is working has become extremely convenient due to the ease of accessing and analysing information. 

What makes monitoring your stock portfolio a necessity?

Before learning how to monitor investments, you must know why it is crucial.

  • You begin investing in the stock market with certain financial goals in mind; you need to keep a track if those goals are being met or at least if you are on the right path
  • You want to invest in a fundamentally sound company to get attractive returns; you need to keep a check on the company’s performance and the returns you receive
  • You must shield yourself from any scams and irregularities
  • The traditional buy-and-hold technique may not necessarily be the optimal way for you

How to track your investment portfolio?

The goal is to maintain a close watch on the health and safety of your investments. Here are some tips for doing so:

  1. Be in the know

Companies and industries get affected by news and events related to them. Keep yourself updated with all the latest happenings. Whether it is a social, political, or other macroeconomic event, it can influence the stock market and the valuation of your holdings.

  1. How are the quarterly results?

Companies in India declare their financial results within 45 days after the end of every quarter. Follow the results to assess the financial performance of the company you are invested in or plan to invest in.

Compare it with the same quarter of previous financial years for better understanding. Also, check the factors affecting the company’s growth in case it is reporting losses.

  1. What’s new with the company?

It is mandatory for companies to intimate the stock exchange about any development that can impact the business and hence the share price. Corporate announcements can be a good source of information for you as an investor.

Events like mergers and acquisitions, promoters selling or buying shares, opening of new manufacturing hubs, etc., can be significant in making investment decisions.

  1. How are the company’s ratings?

Rating agencies like CRISIL, CARE, ICRA, etc., evaluate the company’s financial health and rate the instruments the company issues accordingly. The agencies then publish the ratings on their websites along with a complete analysis of the finances. You can check ratings to understand where the company stands.

  1. What’s the shareholding pattern?

Companies declare their shareholding pattern quarterly and update it on their website. Check and compare it with the earlier quarters to understand any major changes in shareholding. High net-worth individuals, or institutions buying or selling a company’s shares can be an indicator of the prospects that company holds for the future.

  1. Stock price movement

Although not a recommended method to track your investments, you can use a share portfolio tracker to monitor daily prices. It is advisable to not use this tracker for taking important investment decisions. However, any significant movement in your portfolio can be a cue to check for any changes in the fundamentals of the companies you are invested in.

As an investor, it is important for you to track your portfolio – by getting a deeper understanding of how the market works – so that you can try to avoid or minimise losses.

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