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A Publication of WTVP

Evaluating your portfolio’s performance on a regular basis is an important step in reaching your investment goals. While many investors wait until year-end to assess their stock portfolios, it’s important to review your investment strategy throughout the year to be sure it remains in line with your objectives. In fact, many financial advisors suggest that their clients examine their equity holdings every quarter to get a clear picture of how their stocks are performing.

If you haven’t done so in a while, now may be a good time to take a fresh look at your holdings. Some investors like to make a list of the stocks that have met expectations and another of those that have been disappointments. This initiates the portfolio grooming process, allowing you to consider whether some stocks should be sold and begin to evaluate new stocks or new sectors that may help your portfolio.

Since diversification can help reduce volatility, you can consider selling stocks from sectors in which your portfolio is over weighted and buying stocks in areas where your portfolio lacks exposure. A good rule of thumb is to adjust your portfolio as your objectives change and not when the market fluctuates. Your financial advisor can make recommendations that may help you decide which stocks to add to—or delete from—your portfolio. You also can seek guidance from your tax and/or legal advisor.

The most important thing to do as you elevate your portfolio is stay focused on your long-term goals. With a long-term approach, you have the potential to reach your long-term financial objectives. However, a regular portfolio review can help ensure your portfolio is positioned to take advantage of changing markets and economic conditions that complement your long-term objectives. IBI

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