Becks Nunn, Fidelity Editorial Team
I don’t tend to meddle with my investments much throughout the year (I’ve learnt the hard way not to react in the moment). But a lot can happen in twelve months and, like many investors, I see the new year as a chance to reset and review my portfolio.
In the past, I’ve done it ‘my way’. But this year, I thought I’d ask one of our experts to see if they’d be willing to share some of their top tips when reviewing a portfolio. Here’s what she had to say, I hope you find it as useful as I have.
Revisit your goals
“Before you do a deeper dive into your portfolio ask yourself some questions. What are your short, medium and long-term financial goals? Think about what’s important to you. Perhaps you’d like to invest more sustainably. Or maybe something’s happened in your life that’s making you reassess the level of risk you’re willing to take.
“Think about where you are in relation to your goals and where you want to be. Then see if your portfolio is still constructed in a way that will help you achieve your goals.”
Take stock of your accounts
“Many of my clients open a number of accounts with different providers over the years. And they don’t always keep track of them (it’s more common than you might think). Do you know where all your superannuation pots are and the benefits associated with them? It can get quite admin heavy to keep track if you’ve got a number scattered around. You might like to think about bringing them all into one place to manage them more easily.”
Put your investments under the microscope
“I talk to my clients about looking under the bonnet of their portfolio and I can’t stress how important this is. I have clients who think they hold a mix of investments. In reality, they don’t. They might have a good geographical spread of investments. They might have invested in different sectors. Or, they might have selected different kinds of assets (like equities - fund and shares, bonds and cash). But rarely do they do all three well. And it’s vital to have a good mix as investments perform differently during different market, economic and geopolitical conditions. Remember to see how well-diversified your portfolio is, or not as the case may be.”
Factor in upcoming milestones
“Is there anything coming up in the year ahead that you need to think about - such as a big holiday, a wedding, or perhaps even divorce? These are all events that can throw your savings plans off course and some clients can be quite casual when this happens, assuming they’ll just take money from this pot or that. It’s good to think about what the impact of taking money from their portfolio at a certain time might have on their overall strategy.
“If you’re forced to sell when markets are low, you will lock in losses. Certainly, if you’re about to retire, the ‘when’ is even more important.”
If you’d like to learn more, there’s plenty of online guidance in our Learning Hub to help you make better investing decisions.
