The Portfolio Review: Why It Is Important and How to Do It
by Julie Jason
The start of a new year is the perfect time to review your portfolio. If you have not been monitoring your portfolio on a regular basis, now is the time to resolve to do so in the future.
Doing your own review periodically (quarterly or at least yearly) will help you understand whether you are on course to meeting your goals, or whether you need to change your strategy or tactics. The objective of such a review is to catch mistakes and to correct your course on a timely basis, with the ultimate goal of improving your results.
In this article
- How a Review Can Improve Returns
- Post-Crash Objectives
- What You Should Consider
- Portfolio Review Steps
- Related Articles on AAII.com
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How a Review Can Improve Returns
After the end of every calendar quarter, a portfolio needs to be reviewed to make sure that it is achieving your desired results within acceptable risk and other constraints, such as cash flow requirements and tax considerations.
In my experience speaking with investors, I can tell you that it is a rare individual who takes the time to do such a review, even though a regularly scheduled portfolio review is the foundation of a constructive and successful investment program. After all, how else can you determine if you are on track? How else can you assess when and how to change direction?
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