This guide is intended for anyone who has existing investments in the stock or capital markets and is wants to evaluate their portfolio objectively.
It is a multi-part series presented in bite sized portions for easier consumption. There will be some computations to illustrate and will make efforts to keep it simple for easier understanding.
For general understanding, portfolio analysis can be defined as a process to determine if the current allocation of asset classes and individual assets in each asset class would help the investor achieve their short and long term financial goals without taking unnecessary capital risks.
The following are the general steps to analyze your current portfolio
Step 1: Identify the current asset allocation
Step 2: Determine the most optimal asset allocation for your financial goal given the current circumstances and the market trends
Step 3: compare the outcomes of step 1 and step 2, determine course of action to keep your portfolio on course