Investment Management –
How often should I review my investments?
Keeping track of your investments is important to ensure they continue to deliver as expected. But how often is too often?
Unless you are operating as a day trader, there is little need to keep a constant eye on your investments. In fact, this may do more harm than good.
If you are invested in a portfolio designed to deliver a level of income or growth over a period of time, short-term noise can be distracting. That said, there are times when a check-in is valuable.
Market volatility and altering your investments
Short term rises or declines in share prices can dominate news headlines, but often correct within days. Watching the day-by-day ups and downs can distract from your long-term strategy.
However, when markets are volatile, you may welcome a little reassurance that your investment choices remain in line with your strategy. It’s your Investment Manager’s job to monitor markets, underlying fundamentals, industry trends, and opportunities. They can give you the peace of mind you need, or alternatively make changes to your underlying investments where opportunities are presented.
Your Investment Manager will explain their decision-making process whether they have decided to ride out the storm, or make changes.
Review your investment portfolio when your personal circumstances change
When your circumstances change, it is always a good idea to consider adjusting your investment strategy to align with any new priorities.
Key life changes might include:
- Welcoming new children or grandchildren
- Marriage or divorce
- Poor health
- Reducing or increasing hours
- Stopping working/retirement
- Selling a business
- Empty nest
- Adult children returning to the family home
- New caring responsibilities
- Or your wider banking or wealth planning team
You should regularly review your investment portfolio
Even if your circumstances haven’t changed, and you have no immediate concerns with your investments, it is still advisable to review your investments annually.
What is discussed at an annual investment review:
- Review of objectives to ensure your investment strategy continues to align to your overall goals.
- Review of your investment performance against a suitable benchmark. Whether the value of your investments has increased or decreased, a benchmark will help you understand how similar investments performed over the same period.
- Tax efficiency to ensure you’re investing in a tax efficient manner and taking advantage of annual allowances including ISA limits.
- Longer term plans to consider including any future changes to your personal circumstances or income requirements.
- Tactical asset allocation – your Investment Manager can explain any changes to asset class weights
- Any areas of interest or concern.
Regular monitoring of your investments is important. With a good investment strategy designed to deliver growth or income over the long term you can avoid short term distractions.
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