Having built your mutual fund portfolio, the important thing is to maintain it. Richard Cayne of Meyer International, a leading financial consultancy in South-East Asia, talks about common strategies to adopt for maintaining and managing a mutual fund portfolio.The different strategies to manage your funds are listed below:
The Wing-It Strategy
A wing-it strategy means that there is no fixed plan or structure, and one goes by randomly investing, a little here and a little there. Richard Cayne of Meyer International says that it is basically the most common strategy for mutual fund investments. What are the factors that decide how much you invest at what price? It is easy to add money to your portfolio if the plan is clear, but if not, then it is usually a bit of spontaneous investment.
Most financial experts like Richard Cayne of Meyer International would be in agreement that this strategy is likely to be least successful since there is no consistency without planning.
The ability to get into the markets sectors at just the right time is called market timing strategy. The key point in this strategy being, that the purchase is always low and the sale is always at a higher price.However, it is difficult to predict investor behavior, since more than logic, it depends on moods and emotions. Richard Cayne of Meyer International says that more often than not, the reality of the situation tends to be the opposite, i.e. the investors buy at a higher rate and sell low. As a result, there is doubt whether this strategy can work effectively, predicting the future being impossible even for experienced investors. Richard Cayne of Meyer International states that there are many indicators to the market-timing strategy.
Richard Cayne of Meyer International advocates this strategy as the most popular and most effective investment strategy. The reason why this strategy is preached by experts is that the probabilities of making a profit are on your side. 75% of the time markets are going up and 25% they go down. With some perseverance if you can adopt the buy and hold strategy, 75% of the times you will make profit. Another factor that adds to the popularity of this technique is that it is pretty simple to employ. It is very simple and effective to buy and hold.
Richard Cayne of Meyer International says that the best way to manage your portfolio is to follow discipline. You too can be a good investor if you have discipline and have a concrete plan for investment.
Richard Cayne of Meyer International in Bangkok Thailand being a native of Montreal Canada is currently the Managing Director of the Meyer Group which is wholly owned by Asia Wealth Group Holdings ltd a UK Listed financial holding company on the ISDX Stock Exchange.