Archived article: This article was correct at the time of publishing. Tax, investments and pension rules can change over time so the information below may not be current.

Time to spring clean your portfolio?

Spring “officially” starts today (Thursday 20 March) but the weather has improved and the daffodils have been out for a few weeks. It’s the time of year when people traditionally give their homes a top to bottom freshen up and remove any unnecessary clutter. Yet it isn’t just homes that deserve an annual deep clean: it is also vital for investors to periodically stand back and take a long hard look at their investments.

Jason Hollands Jason Hollands
20 March 2014

 

Even originally well planned portfolios will need to be periodically reviewed and rebalanced, as allocations to different asset classes and markets naturally drift over time – that’s especially the case over the last year as many developed stock market indices have scaled to high points not seen for years, while emerging markets have floundered. Because different markets and asset classes don’t move in tandem, that can mean the risk-profile of a portfolio can change materially, potentially no longer matching your needs or goals.

We believe the three key criteria to consider when reviewing a portfolio should include: understanding the level of risk you are exposed, how well balanced the mix of your investments (asset allocation) is and of course the quality of the underlying investments. An appraisal of your investments might require some rebalancing of your asset mix and potentially switching funds that aren’t delivering.

Investment Advisory Service clients will of course be able to discuss this with their adviser and self-directed investors with accounts on our Online Investment Service have access to a range of analysis tools to check the health of their investments.

If you are not yet a client of Bestinvest, why not try our Free Investment Report Service & Tool (FIRST). This will provide you with analysis on your investments to show how much Risk the portfolio is exposed to (based on its volatility), how well balanced the asset allocation is against our renowned research team’s models, and our view on the quality of each fund held. Over 66,000 members of the public have used FIRST over the last year to test the strength of their investments.

Bestinvest First is a guidance-only service, which means it does not provide investment advice or recommendations. The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. Past performance or any yields quoted should not be considered reliable indicators of future returns. This article does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact one of our advisers.

Different funds carry varying levels of risk depending on the geographical region and industry sector in which they invest. You should make yourself aware of these specific risks prior to investing.