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Investing is not a “set it and forget it” activity. While building a plan that reflects your goals, risk tolerance and long-term vision is essential, it’s equally crucial to regularly review and update your plan when necessary.
Routine check-ins can be critical as your life and the investment landscape is always evolving. Our philosophy when helping those we work with is to have quarterly review meetings. This helps ensure we have a full understanding of your current financial picture and you have a full understanding of the strategy we have implemented. Here are key reasons why periodic investment reviews are vital for keeping your financial future on track!
- Your Goals and Lifestyle Can Change
Life is full of milestones such as career shifts, marriage, having children or approaching retirement. Each phase comes with new priorities, which can impact your investment strategy. Maybe you initially aimed for aggressive growth, but now you're more focused on preserving wealth.
Perhaps your savings goals have shifted due to lifestyle changes like buying a home or starting a business. Regularly reviewing your investments ensures that your portfolio is still aligned with your needs as your lifestyle changes.
- Your Risk Tolerance Might Shift
Risk tolerance isn’t static, it can change as your lifestyle or market conditions shift. As you age or approach retirement, you may become more conservative, focusing on protecting what you’ve built rather than chasing higher returns.
On the other hand, a growing income or an improved financial position might allow for more risk-taking. Reviewing your investments gives you the opportunity to adjust the balance between risk and reward.
- Understand Your Portfolio’s Performance
Overtime, some investments may not perform as you initially expected. Some investments may no longer fit your financial goals or might underperform relative to the market. Regular reviews help you understand these trends and identify lagging assets. This allows you to make educated adjustments that are more aligned with your objectives.
- Update Beneficiaries
Choosing someone as your beneficiary means you are legally designating a person or entity to receive your assets after you pass. Life events such as marriage, divorce or the birth of a child often require updating the beneficiaries on your investment accounts.
Delaying can cause issues later, especially as your assets are being separated after your passing. Regular reviews can help make sure your beneficiaries are up to date, avoiding any unintended consequences for your family.
- Evaluate Fees You May Be Paying
Investment fees can silently eat into your returns if you’re not paying attention. You might be paying more for fund management, advisory services or transaction costs than you realize.
Periodic reviews give you a clear picture of the fees you’re incurring and allow you to assess if they are still competitive and justifiable.
- Diversity and Rebalance
Having well-diversified investments can reduce your risk and give you a better chance for long-term growth. However, market changes can cause your portfolio to become unbalanced over time. For example, if one sector performs exceptionally well, it could start to dominate your portfolio, skewing your risk profile away from where it was intended.
Reviewing your investments allows you to monitor these trends and check if they are properly diversified for your strategy.
The Final Word
Your investments are never a “set it and forget it” strategy or a one size fits all approach.
Integrating a routine financial review into your schedule, similar to routines you may already have, such as doctor visits or checking your car’s oil will help bring you confidence that your financial strategy remains on course.
We always recommend discussing this with your trusted financial professionals as they should be able to help guide you through your questions or concerns.
If you found these planning tips helpful, we’d be happy to have a conversation with you. Feel free to visit us at www.rocklinewealth.com for more insights on retirement strategies, and how we can help you reach your financial goals.
Disclosures:
Rockline Wealth Management (RWM) is a registered investment adviser located in Plainview, NY. RWM is registered with the U.S. Securities and Exchange Commission. Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission.
Rockline Wealth Management does not offer tax services. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.
All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client's investment portfolio. Asset allocation and diversification do not ensure or guarantee better performance and cannot eliminate the risk of investment losses.
Past performance is not indicative of future results and every individual’s investment circumstances are different. Individuals should consult their financial professional before implementing their investment plan.