How to do a Year-end Investment Portfolio Review   

financial review
November 16th, 2022 0 Comments

For casual investors, it may be easy to initially create a diversified and substantial investment portfolio and focus on day-to-day life once these investments are squared away. This is especially true for individuals who may be investing in a particular life goal. For example, saving for retirement, may be fine without seeing a significant return on their investments within the next several years. 

It’s understandable why many people take more of a hands-off approach, too. The intricacies of investing are virtually endless. Therefore, monitoring the rise and fall of various stocks, bonds, real estate, treasury bills, certificates of deposits (CD), and more is a full-time endeavor. You can’t check every aspect of your investments on a daily basis without a serious and continual time commitment. Therefore, even if you do, you’ll need extensive knowledge to determine the permanency of any changes in your portfolio’s value. 

Review Your Financial Goals  

Simply put, it’s fine to ignore the day-to-day changes in your portfolio. However, it is essential to review your investments from time to time (and at least once a year) and look for substantial changes that may coincide with changes to your life goals. 

Consider your ambitions and goals a decade, five years, or even just a year ago. Perhaps you were saving to buy a new car or to squirrel away college tuition for your children. Maybe today, those goals have changed or been accomplished, and now it’s time to consider retirement. Additionally, even fulfilling personal endeavors like starting a business or purchasing a vacation home can be included in your financial goals.  

Your life changes dictate your asset allocations, and this is never a fixed point in time. So, if you haven’t done a health check on your investment portfolio in a while, then now is a good time to do so. Here is a primer on the basics to ensure that your long-term investment strategies are align with the trends, and your ambitions. 

Diversification and Asset Allocations  

Diversification and asset allocations are two terms that are frequently used in tandem, but which encompass different but related strategies when it comes to investing. Additionally, diversification entails spreading your investments (or assets) in different buckets (for example, stocks, bonds, and cash). In comparison, asset allocation refers to the exact percentage of these varying buckets in your portfolio.  

To be precise, how these strategies are determined is based on global and market factors. However, they are also determined by your personal goals and your life stages.  

For example, someone saving for a car or a home purchase in the near future might invest their savings in a conservative mix of cash, certificates of deposit (CDs), and short-term bonds to minimize risk as much as possible. Meanwhile, a 40-year-old professional who wants to save for retirement might be able to take on much more risk. Additionally, 60% or more of their savings were invested in stocks, which are riskier in the near future, but tend to have more rewarding long-term payoffs. 

This is the basic formula of diversification and asset allocation, but there are a million additional details that also affect your portfolio.  

Different Investments Lead to Different Results  

Let’s explore how different investments can lead to other financial results. For example, you may have 60% invested in stocks. However, if these stocks are in similar categories (like big-company stocks or stocks that are based in a particular corner of the world), your portfolio may not be as diversified as you think. In addition, there are a number of personal factors to consider, such as your exact age, your current and expected annual income, your current savings, and your future expenses.  

Financial planning with the right financial advisor can help determine which investments suit you best. 

The Best Way to Perform a Year-end Investment Portfolio Review    

Assessing how the individual pieces of your portfolio are performing and how this relates to your current life stage, is an exceptional start to a portfolio review. Additionally, if you want to dive deeper, you’ll need a more comprehensive financial check, and you can only achieve that with the assistance of a financial expert.  

This is where Saddock Wealth can help complete the picture. We take an in-depth look at your planning and investments and develop completely customized science-driven strategies. Moreover, this can help you and your family preserve and increase wealth.  

Schedule Your Year-end Investment Portfolio Review  

We offer a myriad of services that range from financial planning to current investment management. Our financial experts can do a thorough review to ensure that your financial goals and investments are on the same track.  

Schedule your initial consultation today to review your accomplishments and how to continue your investments.  Our experts can handle the challenging part of investments ensuring your portfolio is the best it can be for now, and for many years to come.  

Contact us today.  

Saddock Wealth