Warning: Ignoring Your Investments Just Once a Year Could Cost You a Fortune

The art of investing is not just about putting your money in a portfolio and forgetting about it. A successful investor constantly monitors and evaluates their investments to ensure they are on track to meet their financial goals. As part of our Portfolio Doctor series, we will examine the importance of regularly reviewing your investments and provide guidance on how to assess the health of your fund portfolio.

There are several reasons why reviewing your investments at least once a year is crucial. Firstly, the performance of your investments can be impacted by various factors such as changes in market conditions, economic downturns, and even the departure of a key fund manager. By regularly reviewing your investments, you can identify underperforming funds and take corrective action before they dragged down your entire portfolio.

Another reason why regular review is essential is that your financial goals and risk profile may have changed since you first invested. For example, if you are nearing retirement, you may want to reduce your exposure to high-risk investments and move towards more conservative options. By regularly reviewing your investments, you can ensure that your portfolio remains aligned with your changed goals and risk profile.

So how do you go about reviewing your investments? The first step is to assess the performance of each fund in your portfolio. You can do this by comparing the returns of each fund against its benchmark and peer group. If you find that a fund has consistently underperformed its peers over the past year, it may be time to consider switching to a better-performing fund.

Next, examine the scheme and its suitability in relation to your goals. Consider factors such as the fund's investment objective, risk profile, and fees. Ask yourself if the fund still aligns with your investment goals and risk tolerance. If not, it may be time to sell the fund and move to a more suitable option.

Finally, if you are unsure about how to review your investments or need advice on how to manage your portfolio, consider consulting a financial advisor. A financial advisor can provide you with personalized advice and guidance on how to optimize your portfolio and achieve your financial goals.

In conclusion, regularly reviewing your investments is essential to ensure that your portfolio remains on track to meet your financial goals. By assessing the performance of each fund, examining the scheme and its suitability, and taking corrective action when necessary, you can ensure that your investments are working hard to deliver the returns you need to achieve financial success.