Stay on Track: 5 key steps to follow to review your investment portfolio

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Examining your investment portfolio is a vital measure to ensure it stays aligned with your financial objectives. As life circumstances evolve, such as the addition of dependents or approaching retirement, your risk tolerance may change. Conducting regular reviews allows you to evaluate whether your portfolio still corresponds to your present level of risk comfort. As your financial goals develop, it’s essential to reassess your portfolio to guarantee its ongoing alignment with your long-term plans, be it saving for a home, retirement, or other aspirations.

So, how should you go about evaluating your investment portfolio? Each portfolio necessitates a customized benchmark for assessment. Naturally, your long-term goals, specifically the funds needed for these objectives, serve as inherent benchmarks for conducting a portfolio review.

Gather account statements, reports, and any pertinent documents associated with your investments. This encompasses information about individual holdings (such as stocks, bonds, mutual funds, etc.), their purchase prices, current values, fees, and transaction records. Leverage online tools, portfolio management platforms, or a spreadsheet to consolidate and analyse all this information in one central location. This will simplify the review process.

Compute the percentage distribution of various asset classes (stocks, bonds, real estate) in your portfolio. Contrast this with your predetermined target asset allocation, which you set based on your risk tolerance and investment objectives (e.g., aggressive, moderate, conservative). If the existing allocation varies considerably from your target, there may be a need for rebalancing.

Monitor the individual performance of each investment and compare