What is the value of portfolio analysis Can it be dangerous

What is the value of portfolio analysis?  Can it be dangerous?  Why or why not?  Explain your answer in your own words. 

Solution

Portfolio analysis is necessary to meet ones investing goals. A periodic analysis of the portfolio will help you understand exactly how your portfolio is performing and whether your investments are properly allocated, decide what needs to be changed as per the market trend. It may also help in creating your financial plan as per personal need. Some other reasons for the same are mentioned below:

It could be dangerous especially because it is important to analyze your investment portfolio during times of turbulence in the stock market. Overall market conditions can change quickly and the health of individual companies or market segment can deteriorate fast. Even though it may be painful to analyze your portfolio during a falling market period, it is vital to do so else the loss suffered will be more.