Investment Portfolio Review Checklist: Stay on Track

Published on: 31st December 2024

When was the last time you gave your investment portfolio a proper check-up?

Life moves fast, and markets can change even faster. Regular portfolio reviews are essential to make sure your investments are working hard for you and staying aligned with your financial goals.

If you’re wondering where to start, don’t worry – we’ve got you covered with this simple yet comprehensive checklist.

1. Define Your Financial Goals

First things first: what are you aiming for? Your financial goals might include buying a home, funding a child’s education, or building a retirement nest egg.

Over time, these goals can evolve, so it’s crucial to ensure your investments still match your aspirations.

Ask yourself:

• Have there been any major life changes, like a new job, marriage, or children?

• Are your goals short-, medium-, or long-term?

• Does your current portfolio reflect these priorities?

Keeping your goals clear ensures your investments are purposeful and on track.

2. Check Your Asset Allocation

Asset allocation is the backbone of your investment strategy. It determines how your money is spread across different asset classes, such as stocks, bonds, and real estate.

Over time, market movements can cause your portfolio’s balance to drift, potentially increasing your risk level.

Take a moment to:

• Review the current allocation of your portfolio.

• Compare it to your desired mix based on your risk tolerance.

• Rebalance, if necessary, to maintain the right balance for your financial situation.

Regularly adjusting your portfolio helps to keep it resilient in the face of market changes.

3. Evaluate Investment Performance

How are your investments performing? While it’s easy to focus on individual winners and losers, it’s more important to assess your portfolio’s overall performance.

Here’s how to do it:

• Compare each investment’s performance to relevant benchmarks. For example, is your stock fund keeping up with the FTSE 100?

• Look at your portfolio’s total return and check if it aligns with your expectations and goals.

• Be cautious with underperformers – not every dip is a reason to sell, but consistent lagging might be.

Performance reviews help identify areas for improvement while keeping emotions in check.

4. Reassess Your Risk Exposure

Risk and reward go hand in hand, but has your tolerance for risk changed? Major life events or market volatility can impact how much risk you’re willing or able to take.

Ask yourself:

• Are you still comfortable with your portfolio’s level of risk?

• Is your portfolio diversified enough to reduce exposure to specific sectors or regions?

Diversification is your friend here. Spreading your investments across various asset types and industries helps cushion your portfolio against sudden market swings.

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5. Examine Fees and Costs

Hidden fees can quietly eat into your returns over time. Regularly reviewing your investment costs can free up more of your money to grow.

Here’s what to look for:

• Check the expense ratios on mutual funds or ETFs. Are there lower-cost alternatives?

• Review management fees for any advisory services you use.

• Consider the tax implications of your investments. Could you benefit from tax-efficient strategies like ISAs or pension contributions?

Minimising costs means more of your hard-earned money stays in your pocket.

6. Monitor Market and Economic Trends

The financial world is ever-changing, and staying informed can help you make smarter decisions.

While you don’t need to follow every market move, keeping an eye on key trends is wise.

Consider:

• How current events, like interest rate changes or geopolitical issues, might impact your investments.

• Whether your portfolio is positioned to weather economic downturns or benefit from emerging opportunities.

Staying informed allows you to anticipate challenges and seize opportunities.

7. Plan for Future Contributions or Withdrawals

Your portfolio isn’t a set-it-and-forget-it deal. Regular contributions and planned withdrawals play a big role in its growth and sustainability.

Think about:

• Upcoming financial needs that might require liquidity.

• Opportunities to add to your portfolio, such as through workplace pension schemes or automated investment plans.

A steady strategy ensures your portfolio continues to work for you over the long haul.

8. Keep Records and Plan Your Next Review

Finally, make it a habit to document your findings and decisions. A good record-keeping system will help you track progress and identify patterns over time.

Don’t forget to:

• Record any changes made to your portfolio.

• Schedule your next review. Whether it’s quarterly or annually, consistency is key.

Planning your reviews keeps you accountable and ensures your investments get the attention they deserve.

Conclusion

Taking the time to review your investment portfolio doesn’t just help you stay on track – it gives you confidence and control over your financial future.

By following this checklist, you’ll be well-equipped to make informed decisions and adapt to changes, whether they’re in your personal life or the market.

So, grab your portfolio statements and get started today. Your future self will thank you!