Choosing the right mutual funds is only one part of building a long-term investment portfolio. As investors approach retirement, it becomes equally important to review asset allocation, diversification and the level of risk being taken. Holding several mutual funds does not necessarily mean a portfolio is well diversified, especially when multiple schemes have similar market-cap exposure or belong to the same fund house.
A portfolio review can help investors identify overlapping investments, excessive exposure to a particular market segment and gaps in asset allocation. It can also help determine whether the existing SIP strategy is aligned with the investor's financial goals and time horizon.
