If you’re an investor, it’s important to regularly review your investment portfolio to ensure that you are staying on track with your goals and making the most of your financial investments. But how often should these reviews occur? Reviewing your portfolio is so critical and how frequently you conduct thorough check-ins will vary based on your personal preferences and goals. With the right approach, you can keep your finances structured and secure while never missing a beat when it comes to developing smart strategies for future growth.
It is best to review your portfolio thoroughly at least once a year. Typically doing a “check in” quarterly is a good idea as well. A “check-in” can be as simple as getting an idea of balances and seeing what the change has been in the last 3 months. A “check in” can also be a good time to get up to speed on what has been going on in the financial markets to see if adjustments, if any, are necessary. However, “check ins” are exactly that it does not mean that action needs to be taken.
A thorough review would involve reviewing asset allocation, conducting a holding analysis, reviewing beneficiaries, discussing goals and how the portfolio is tied to those goals, risk tolerance, reviewing overall investment objective, reviewing beneficiaries on various accounts, reviewing tax efficiency and tax allocation, etc. Doing this at least once per year is a good rule of thumb.
Each of these areas are important when it comes to your investment portfolio. You do not want to be allocated in a risky investment if you are using this portfolio to fund a goal in the short term. Typically, you do not want to own municipal bonds inside of a retirement account where you do not get the tax-free benefit of owning the municipal bond. These are just a couple of examples of why it would be ideal to complete a more in-depth analysis of what you have invested in your portfolio. You do not want to be in a position where your portfolio is not performing at its optimal level due to poor asset allocation or asset location.
Also, checking your portfolio when there is a change in your life is a good rule of thumb as well. An individual’s financial plan is always changing so if there is a major life event or changes in your financial situation then typically this would warrant a review of your financial picture and part of that financial picture would be your portfolio.
In summary, once a year is a good target for reviewing your portfolio. While you’re revisiting your portfolio is good to review your financial situations and your financial goals to see what if anything has changed. This can help you identify if there are additional adjustments necessary as you move forward with growing your money in the long term. As always, if you need help with reviewing your portfolio or would like a second opinion of how you are currently allocation, please give us a call or contact our office. We have multiple professionals with expertise in investment management and financial planning that can provide value in multiple areas as it relates to your goals.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.