Why Have an Annual Portfolio Review?

Doctors recommend that you get a physical checkup about once a year or so. Similarly, financial advisors recommend that you get a portfolio checkup once a year, sitting down to meet with your advisor and make sure everything is still on track. A portfolio review will either provide the opportunity to make helpful adjustments, or else give you the reassurance that everything is going well.

This may seem like an unnecessary step in the retirement planning process, and some investors assume it is acceptable to simply check the performance and, if everything looks positive, leave things as they are. We encourage clients to come in for a deeper look at their portfolio—and we do so for several reasons.

5 Reasons to Have a Portfolio Review

Some of those reasons include:

Your investment goals may have changed. You may have multiple financial goals, and a single investment portfolio to help you meet those goals. As such, it is a good idea to regularly revisit your priorities and make sure your portfolio aligns with those priorities. Maybe you’re saving for a new house but also to provide college tuition for your kids; you may need to change your portfolio to reflect current real estate market and college tuition costs, and similarly you may want to balance both of those things against your own retirement plans.

Your investments may have changed. Investments are not static. Just as your goals can change, so can your actual investments. A mutual fund may change its approach to investment, and a company in which you own stock may experience a change in fortunes. A portfolio review allows you to examine not just your broad investment goals, but also the role each investment plays within your portfolio.

You may be paying more taxes than you need to. Your annual review is a great time to ask your advisor what you can be doing to minimize your tax burden. As the value of your investment changes, and as tax laws fluctuate, you may need to reappraise your overall tax strategy.

You may need to review your estate plan. Estate plans should be reviewed annually, and revised to reflect changes in your family and in your assets. Why not do this when you’re in the office for a full portfolio review?

Your retirement plan may change. Maybe you have a retirement plan based on the notion that you’ll work until you’re 70, but recently you’ve been thinking that retiring earlier and moving to the beach sounds awfully nice. This is just the kind of thing you can and should bring up in a portfolio review.

To learn more about the portfolio review process, we invite you to contact Stonepath Wealth Management today.