Reasons Why You Should Review Your Investment Portfolio

While for some, reviewing their investment portfolio is a daunting task, for others it is simply life that gets in the way. But no matter what your excuse, it is absolutely necessary to review your investment portfolio from time to time.

It helps you to ascertain whether your investments are on the right track and that you’re doing a wise thing by retaining them in your portfolio. It also helps you to know if your investments are still aligned with your personal goals.

If you can relate to any of the following conditions then it may be time for you to review your investment portfolio:

You Can’t Remember When you Did it Last

Constantly monitoring your investments can make you worry about the slightest fluctuation in the market, even if you know that it is only temporary. While engaging so frequently in reviewing it is not advisable, neglecting it for a long time is not advisable either.

If you have a difficult time recalling when was the last time you reviewed your portfolio then it is a sign that you should carry out this task sometime soon.

The ideal frequency for reviewing your portfolio is at least once every year. Around this time you can also schedule other important financial planning tasks. It is the perfect timeframe as the long term trajectory of your investments will become clear to you and also gives you the opportunity to take the right action at the right time to minimize the negative influence.

You’re Not Clear About Your Investment Objectives

The wider goals of your life should be reflected in the investments that you make. Is it your aim to build a nest egg for yourself which can come in handy when you retire in 20 years from now? Or is it your intention to finance the education of your child in which case you cannot lock away the investment for a long period?

The objectives that you have will have a tremendous impact on the amount of money that you invest and also the level of risk that you are willing to take. Reviewing your portfolio helps you to ascertain if your investment objectives are being met or whether you need to rearrange your investments so that they are better aligned with your new objectives.

Change in Your Financial Situation

Very rarely does a financial situation prevail for a long time? It is only natural that your financial situation will change and when it does, it is a good time to take a second look at that investment portfolio of yours.

Consider the scenario where you have been given a big raise at your job. This means that your ability to invest and also your risk appetite will increase proportionately.

On the other hand if you have retired, you may need to withdraw money more often in the absence of a regular income and as a result, the money that you can invest and also the amount of risk that you can take will substantially decrease. Your financial situation gives your investment portfolio the structure that it should have.

A Big Life Event

Certain events in your life are bound to have an impact on your investment strategy and it is these events that we refer to as big life events here. These can include getting married or divorced, starting a family or retiring and when any of these events come along you should take a pause and review your investment portfolio.

You’re Unaware of How Your Investments Performed Last Year

Meticulously tracking your investments can result in you getting affected by every slightest variation that volatile markets usually undergo. The value of your investments can rise and fall over time and you should accept that the same will happen with your investments too.

That being said, it is equally important to be aware of how the investments performed in the last one year so that you can make any changes if they are required.

Along with the signs mentioned above, another reason to review your portfolio is that your investments have been performing poorly for a long period of time. It is also equally important for you to secure your investments by taking out policies and writing a Will using a free Will kit.

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