Reviewing your portfolio allows you to check the performance of your investments and see if there is a need to change anything.  I recommend you do this once a year and this video will show you things to consider while performing your review. 

What’s up my name’s Maggie Gomez and I drop videos every Friday teaching beginners how to invest and feel confident in their financial life. I’m a Certified Financial Planner and have worked as a Financial Advisor for Morgan Stanley and Etrade. I eventually left to create Money with Maggie where you can receive professional financial guidance regardless of your net worth. Take a look at my services in the link below and let’s get started.

Think of your portfolio review as checking in with your employees if you were a manager. 

From this perspective what’s the point of a review? You want to make sure your employees are in alignment with the goals for your company, that they’re making progress towards those goals, and that they are still cost-effective. 

Translating this towards reviewing your portfolio the same principles apply. 

The first step is to ask: Are your investments in alignment with your goals? To know this, you have to understand your portfolio goals. If you’re 10 years or more from retirement or needing the money to pay your bills, you’re likely in the accumulation phase of life and will be focused on the overall growth of your portfolio. If you’re less than 10 years from needing the money, you’re likely in the preservation phase where you want to start focusing on reducing risk to begin protecting what you’ve accumulated while still growing your assets overall. If you’ve entered retirement and now need to use your money, then you’ve entered the distribution phase. Here you may seek a much more conservative approach and look for income-producing investments. 

Using your phase of life to guide you through step one, check first that your investments fall in line with the phase you’re in. If you have really conservative investments but are far from using the money, then you may want to make changes to get that money working more appropriately for you. The opposite applies too, if you need the funds soon, make sure you’re not invested too aggressively. This is especially important now being at all-time highs, this could cause you to lose a lot of money and not have the time or income on your side to recover your losses. 

How do you check this? Look at your statement or online and find your asset allocation. It will be a piechart that looks something like this (point down): 

The further you are from retirement or needing the funds, the more aggressive you can be in theory. The closer you get to using the money, the more conservative your investments should become, again in theory because we all have different capacities to take on risk. 

Step 2 is to ask: Are your investments making progress towards your goals? Start by reviewing each investment within it’s category here’s how:

Once you know where your investment falls you can review its performance against what is typical performance for that investment type. 

If you use index funds or an ETF that mirrors an index, this will be really quick and easy. All you do is plug your investment from each category into google and check it against the index. Here’s how:

If you see that the fund or ETF is off from the index, then you want to dig a bit deeper to find out what’s going on and potentially make changes. 

If you’re using individual stocks within your portfolio, use tip-ranks to give you an idea of what analysts expect from the company.  Keep in mind that they aren’t always right and can be really wrong, but use this along with your own common sense. If you are still using the company on a regular basis and your friends and family are too, then it makes sense to keep holding as long as you don’t see any red flags. take a look at this video for help researching stocks

If you’re using mutual funds, use the same example I shared earlier by plugging the fund into google and compare it to the index. With mutual funds (aside from index funds) you typically pay a higher fee than index investing, so you want to make sure your performance is better than the index otherwise the fee probably isn’t worth it. here’s an example. Use your own fund for comparison. 

The 3rd step is to review the help you receive. If you’re paying any management fees to a financial advisor, ask yourself if they’re still offering value for the fee you pay. They should be reviewing your portfolio on an annual basis and communicating that with you. Sometimes advisors do this at the beginning of a relationship with you and then forget about you over the years. I’m guessing you don’t have an advisor if you’re watching this and reviewing your own portfolio, but still wanted to note that. 

Another thing about fees I want to mention: don’t obsess about paying the lowest fee possible. Keeping fees low overall allows you to keep more of your money, but if you’re so concerned with fees that you don’t invest then you’re missing the point. You want the fee you pay to be worth the service it provides. A good example of this is what we just covered with the mutual fund, in that case, you pay more for worse performance. If you’re paying more for a fund then you want the performance to be better than the index fund.   

If you’d like a second opinion on your investment strategy or just need some help getting started,  I’m offering individual Financial Guidance sessions, so take a look through the link to my services below if that sounds like something you could benefit from..

Thanks so much for watching, remember to subscribe if you’re new here, and I’ll see you next week, bye!