Even the best-planned portfolios need to be reviewed regularly
It goes without saying that everyone should take some time to review their portfolios every once in a while. The only constant in life is change – and chances are your life has changed since you last reviewed your investment portfolio.
Do you know if you are still on track to reach your goals? Or if your money is working as hard for you as it could be? Your financial plan needs to be reviewed regularly. Markets go up and down, tax rules change, and your personal financial needs and goals shift – perhaps you are nearing retirement, your income has changed or you have recently received a lump sum to invest.
As financial markets are constantly on the move, over time the asset allocation of your portfolio will change, as could the level of risk you are taking. A regular check provides the opportunity to realign your investments with your investment objectives, and rebalancing your portfolio will ensure that your needs, goals and risk appetite are aligned to meet your short- and long-term financial goals.
Your financial planning will need to reflect changes in your life. Some of these you can predict, others will inevitably come out of the blue. Have any life changes occurred during the past 12 months? Have you married or remarried, had a child, started a new job or retired? Has there been a divorce or a child nearing university age? If so, you may need to make some changes to your plans and your investment portfolio. Have your priorities changed?
It doesn’t take a significant amount of time for you to see the effects of differing levels of performance across different assets. If equities have a good year, but property and/or cash are under pressure, your carefully balanced approach to risk can quickly move out of line.
It is therefore sensible to make sure you review those allocations on a regular basis – and unless you have a significant amount of money, annually is generally considered sensible. This doesn’t have to be a lengthy process – you just need to make sure your objectives are still in sight and the underlying risk levels remain acceptable.
Your review might therefore include making any necessary changes:
- Checking your current valuations and resulting asset allocation
- Rebalancing of funds to realign your risk level
- Considering an increase in contributions to maximise use of new limits, account for salary reviews or any bonuses received
- Considering changes in legislation, such as the Pension Freedoms, which could impact on your choice of tax-efficient products
- A review of your Will and list of nominated beneficiaries
INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE.
THE VALUE OF INVESTMENTS AND
INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED.
PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE.