Investing is not merely about putting money into stocks, or mutual funds; it's about managing and growing your wealth intelligently. One essential tool that aids in this pursuit is the 'Portfolio Health Score.' This score encapsulates the health, strength, and efficiency of your investment portfolio. Understanding it and striving for a high health score can significantly impact your financial well-being and pave the way for a more secure financial future.
A Portfolio Health Score is a numerical representation, typically on a scale of 0 to 100, indicating the overall health of your investment portfolio. It's a comprehensive evaluation that considers diversification, asset allocation, risk management, and the quality of your investments. Essentially, it encapsulates the risk-return balance and overall robustness of your investment strategy.
Analyzing your all investments all one by one would be such a time-consuming and tedious task that's why we do the hard part for you. We evaluate most of the investments in a portfolio including stocks and mutual funds on parameters like their financial report which is the Quality, Valuation for stocks, and mutual funds we evaluate the funds on parameters such as Performance, Risk-Reward, Underlying Portfolio, and Operations by the AMC. One can see the detailed breakup of health scores for stocks by going to the stocks analytics Quality-Valuation and Technical section and mutual funds analytics page for a detailed breakup of their fund's health.
Why fixing health scores is important?
Enhancing your portfolio's health score is vital because it provides a clear evaluation of its overall stability, diversification, and potential for growth. By addressing weak areas and optimizing investments, you maximize the potential for higher returns, minimize risks, and ensure your financial portfolio is well-prepared to meet your long-term financial objectives.
The health score is not the measure of the performance of your portfolio, a poor health score portfolio can also generate significant returns no doubt. Our goal here is to help you in the medium to long term that's why the health score asses the fundamentals of investments and not a lot of technicals.
If your goal is to build long-term wealth for yourself and your family then improving your health score is very essential. A higher health score means a healthier, more balanced, and resilient portfolio, aligning with your financial goals and securing your financial future. It gives your portfolio strength to navigate the tough times of market volatility and uncertainty.
How can I fix my health score?
Kudos to you if you have decided to fix your health score! Your future self will thank you! While nothing is certain in the world of capital markets we also do not guarantee a higher health score will make all your dreams come true, but we have to be realistic.
Under your health score in the portfolio dashboard you will see the "Fix Issues In Your Portfolio" section. We have tried to highlight the issues that don't align with industry standards of investing for long-term wealth creation.
Risky Stocks with Poor Quality: Click on this insight that tells you to have poor-quality stocks. These are the stocks that have bad financial performance and are highly risky. Keeping these stocks in your portfolio means they may not be able to give you steady long-term returns due to their poor balance sheet and volatile market capitalization.
Unhealthy Funds: Click on this insight that tells you to have mutual funds in your portfolio that have poor performance, portfolio, operation, and risk-rewards scores. This means that these funds have not been able to perform in different market conditions, don't have a strong diverse underlying stock portfolio, are high risk, and charge a high expense ratio.
While there are other insights we have highlighted on your portfolio dashboard as issues the above-mentioned two insights/issues are the most important direct contributors to your health score. Fixing these issues will significantly improve your health score.
Check alternatives to your issues in the portfolio that we have provided in each issue on the portfolio dashboard.
Decide on the alternative stocks or mutual funds you want your existing to be replaced with from the options that we have provided against each poor-quality stock and mutual fund.
You can not directly transact from investment to buy or sell anything as it is not a broker therefore you will have to go to your broker and make your informed decision yourself.
The issues or insights we show in your portfolio change from time to time over a month as we keep assessing the investments and updating the scores and evaluations. We suggest you frequently check and monitor your investments for better optimization, fixing it right when it is found.
We hope that it helps you and puts your portfolio in the top 1% of high-quality portfolios. Feel free to reach out to us in our help section in case you need more support and guidance on our platform, we are happy to help.
Please Note:
Our analysis is not investment advice. We are not a registered investment advisor.
At times we may not have all the data for some stocks and mutual funds that would have recently been listed or the company data itself is not available.
Some of the analytics data that we show on the app come from our 3rd party data partners. No portfolio data is shared or shown to any such partner or 3rd party vendor.