Written by Why Portfolio Reviews Are Essential
- Adjust to Market Changes: Regular portfolio reviews ensure that your investments stay aligned with the current market conditions and your financial goals.
- Rebalance for Optimal Asset Allocation: Over time, some investments may outperform others. Reviewing your portfolio helps you rebalance your assets to maintain your desired allocation of stocks, bonds, and other assets.
- Track Performance Against Benchmarks: A portfolio review allows you to compare your performance with key benchmarks, such as the S&P 500, to evaluate whether your strategy is working.
Steps for Reviewing Your Portfolio
- Assess Current Holdings: Look at the assets you currently own and their performance. Determine whether they still meet your financial goals.
- Rebalance Your Portfolio: If some investments have grown too large or small relative to others, rebalance your portfolio to maintain diversification and risk levels.
- Evaluate Risk Exposure: Consider whether your portfolio has become too risky or conservative based on market conditions and your personal circumstances.
- Adjust for Life Changes: Life events like marriage, retirement, or the birth of a child can impact your financial goals. Make necessary adjustments to your portfolio accordingly.
When to Review Your Portfolio
- Annually: At a minimum, review your portfolio once a year to ensure it is still aligned with your goals.
- After Major Life Changes: Significant life changes should prompt a review of your investments to ensure your portfolio still aligns with your current financial situation.
- During Market Volatility: When the market experiences major swings, reviewing your portfolio allows you to assess risk exposure and make necessary adjustments.
*Disclaimer: The content in this post is for informational purposes only. The views expressed are those of the author and may not reflect those of any affiliated organizations. No guarantees are made regarding the accuracy or reliability of the information. Use at your own risk.