How do I do my Portfolio balancing in 7 steps

 *Portfolio balancing:*

1. I Keep comparing your stock's performance with Nifty.

2. On an average if the portfolio starts showing more of a negative trend (>/= 6 times out of 10 compared to the nifty). i.e. either I'm getting lesser return % in a day compared to nifty, then the invested stocks need to he shuffled. 

_i.e. reduce some shares in non performing stocks & add that money to the performing ones._

*How to do?*

This is more of a question, how to find a non performing stock.

Caution : a stock showing negative trend , isn't necessarily a bad stock.

We need to know the nature of a particular stock. For ex. Largcap stocks generally tend to move slowly while smallcaps move faster with high volatility.

Let's explore how to find a non performing stock.

1. On each time you see your portfolio performing lesser than expected , check which stocks are responsible for this negative trend.

2. Generally, the stocks which have Lower than nifty growth for the day & your invested amount is significant, such stocks are to be held responsible.

3. But wait, you don't have to rightaway sell it. 

A. Monitor if the same stock or the same 2-3 stocks in your portfolio are responsible for your portfolio non-performance each time. Make a note.

B. Check for market news if there's a short term downtrend or a temporary reason like COVID or wars etc. For the slowdown of the stock.

C. See the history of the stock how it moves generally , what are it's long term trends & CAGR. And will selling it he worth.

D. Check what's the overall return from this stock in long term. (For ex. If a share "A" has given you 100% return in 1 year and suddenly showing downtrend, you don't need to sell it as often market corrects itself) 

4. Once you've found a stock that everytime lowers your portfolio growth (over a period of few months) & you've already invested in it from a long time, then it's time to probably identify it as a non performing stock.

5. Wait for the right time when the stock goes up or at least has lesser loss & try to sell it slowly (few stocks at a time) & see if it gives a positive impact on your portfolio.

6. Similarly, keep checking for the stocks that are performing better than nifty & if a little study & analysis of it's long term trends , news etc. Make you comfortable to invest in it. It's good time to go for it. Keep gradually selling the non performing stock and buying the performing stock.

7. Repeat until it makes your portfolio at least performing little better or equal to nifty.

Well you've balanced your portfolio!

But don't be greedy, sometime non performing stocks start performing well all of a sudden. So sell slowly. Upto an optimum point. 

Keep balanced money in all stocks. Don't get emotional over gain or loss.

In the following stocks for ex. For the time being as per my analysis, IEX and Dmart are non performing whereas arvind and suzlon are performing. (Pls use your own analysis it's not a recommendation. It totally depends on many factors like the investment timing, invested value , news etc)

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