Regular Investment Portfolio Review is SO important!

We see many new clients and their existing portfolios. Often the portfolios are not a pretty sight, and few clients have the time, knowledge or psychological ability to construct AND maintain a suitable portfolio. An important part of maintaining a successful portfolio is regular review, ideally once every three months. Regular review is important because personal circumstances and markets are always changing. It’s also a chance to check that the portfolio is on target and whether or not it needs rebalancing. Last but not least, there may be one or two mistakes that need correcting!  A total, holistic approach is best, here are some of the key steps BEFORE you actually review your portfolio:


Before reviewing an investment portfolio, it’s essential to have a full understanding of your total financial situation. You should have a list of all of your assets, liabilities, income and expenses. Then you can see how your investments fit with the rest of your finances and take decisions accordingly.

What are your personal circumstances?

 What stage of life are you at? Late fifties, looking towards retirement, or mid-thirties with two kids? Whatever your situation it will have an important effect on how you review your portfolio. This should already have been considered when making the original investment plan. The main point is that your portfolio asset allocation should reflect your own personal situation, see next point.

What is your planned asset allocation?

This is a big subject of its own, and we’ll be explaining further in a future article. However, there should be a planned asset allocation between such classes as stocks, bonds, property and cash, for simplicity, let’s say 25% each. Then within each class, there should be further allocations; for example, stocks could be 50% small companies, 25% large and 25% growth companies.  At each review, as markets change, thought should be given to rebalance these splits so as to stick to the original plan. Of course, a review is also a good opportunity to change the asset allocation, this might reflect recent market changes or developments in your personal circumstances.

What are your financial objectives?

You might have a target of becoming financially independent at 55 or maybe you want to buy a new house. Targets/objectives need timeframes; otherwise, how will you know if you are on target or not?  What investment return are you aiming for, and what have you achieved so far?


Attitude to risk?

We define risk as to the permanent loss of capital, or a loss that will not be recovered for a very long time. Most people find a 10% loss much more traumatic than they will find a 10% gain enjoyable! What about you? What is your own attitude to financial losses? Could you stand (or afford) a big drop in your portfolio? Your attitude to risk should be reflected in your portfolio choices from the beginning.

Portfolio Psychology

This is a huge subject of its own, but human psychology has a deep effect on investment decisions. Here are just two brief examples:  Anchoring – this is when a person bases their decision making on a piece of information that they know, but that has little to do with the facts. In portfolios this translates into people holding on to a loss-making investment, imagining that the price they paid is what a stock is worth! Loss aversion – related to anchoring, people hold onto hopeless, loss-making, investments because they cannot face the loss that they will realise if they sell.

Now you can finally look at your portfolio!

So ask yourself these questions:

Does the portfolio fit with my TOTAL financial situation?

Do I have an asset allocation plan?

Does the portfolio match the plan, or do I need to make some changes?

What are my portfolio investment targets?

Am I on target? If not, what should I do?

What is my attitude to risk?

Does my portfolio match my risk appetite?

Can I honestly handle my own psychology when making investment decisions?

Why is each investment there?

How does your portfolio “fit” with your questions above? Do you need to make some changes, if so, what changes?



This article is only a brief and simple introduction to a complex subject. We find most investors just don’t have the time, knowledge or psychological ability to objectively analyse their own portfolio. This often leads to poor investment results, usually through buying high and selling low!

Our consultants provide the professional knowledge and experience to objectively review your portfolio, without any emotional attachment to the investments within it. We will then give our independent recommendations, but of course, you are still free to make your own decisions if you wish.


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