The benefits of reviewing your investment portfolio

Investment strategies can take a lot of effort to implement effectively. Even if you have made well-researched and well-diversified investments with clear-cut goals, it’s important to regularly review your portfolio to ensure it stays on track with your financial goals.

Keeping your portfolio on track

Markets are always prone to change, and your personal circumstances are no different. Milestone life events, your tolerance for risk, financial needs, and the current state of your portfolio can all influence your financial goals.

Regular portfolio reviews help you identify any changes in the market, consider whether your goals have changed, and provide the opportunity to check your investments still align with your financial goals (and make changes if not). With regular portfolio reviews, you can:

• Identify areas of underperformance or over-exposure to risk
• Analyse your portfolio after recent changes to market conditions
• Rebalance your portfolio to keep your desired asset allocation
• Keep an eye on any new investment opportunities
• Adjust your portfolio based on changes in your personal circumstances

Key components to consider

After taking into account your current financial situation, investment goals, and risk tolerance, it helps to take some time to analyse your portfolio. A thorough and effective investment portfolio review involves carefully examining several key components, including:

• Asset Allocation: The mix of different asset classes in your portfolio, such as shares, bonds, property, cash, and alternative investments.
• Diversification: The spread of investments within each asset class designed to minimise risk and maximise potential returns. This includes geographic, sector, and asset class diversification.
• Performance: Your portfolio’s performance over different time periods to review its success and identify any areas for improvement.
• Fees and Costs: The costs associated with your investments. This includes management fees, administration fees, and transaction fees.
• Taxes: The impact taxes have on your portfolio and any strategies you have for managing this impact.

If it’s time to review your portfolio, get in touch with us. As investment advisers, we are here to help ensure your investments remain on track to meet your financial objectives with recommendations tailored for you.

Balancing risk and return

Another key aspect of an investment portfolio review is balancing your potential risk and return. This requires finding a middle ground between the potential for higher returns and the level of risk you are willing to take on. Important things to consider are:

• Your risk tolerance: Are you comfortable with the potential for losses for the potential of higher returns?
• Your investment horizon: When will you need to access your funds? What are your current financial needs?
• Your reasons for investing: Are you saving for retirement, or another specific goal?

After reviewing your portfolio, you can always make adjustments as needed to ensure your portfolio remains on track. For example, if a change in your personal situation means your risk tolerance is no longer consistent with the risk of your portfolio, it may be time to adjust.

Questions to ask an investment adviser

As investment advisers, we’re here to answer any questions you may have about your investment portfolio. If you’re unsure, some good questions to consider would be:

• What are the risks in my portfolio?
• Does my portfolio match my goals and risk tolerance?
• What adjustments can I make?
• How will we monitor and review my portfolio going forward?
• Do you have any further recommendations for my investment objectives

If you’re looking to review your investment portfolio but don’t know where to start, don’t hesitate to reach out to us. We take the time to listen to you, understand your investment portfolio, and can complete a review to check that it remains fit for your specific goals.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.