Dollar for Dollar: Reviewing Your Portfolio to Ensure Growth


Although you’re investing for the long term, you’ll still probably need to make some changes as time goes by. Your financial situation and your needs are likely to evolve, and market conditions may present new risks or opportunities. What’s more, the performance of different investments throughout the course of time can change the balance of your portfolio. So it’s important to regularly review your holdings, and make changes as necessary.


1. Define Specific Goals

2. Diversify Among Investment Types

3. Stay Invested

4. Periodically Review Your Portfolio

Last issue, we covered the importance of defining your specific goals and then diversifying among different investment types.This issue closes out the final two steps: staying invested covered in the L Style Gain column, and periodically reviewing your portfolio, covered below.

Cornerstones of Investing

Periodically Review Your Portfolio

In the current financial environment, it’s important to stay focused on your personal financial goals – and not become emotionally attached to the securities you own. Try conducting a comprehensive review of your portfolio and your asset allocation plan, which includes having a conversation about your overall personal goals for the new year. If necessary, you can readjust your portfolio accordingly to reflect your changing needs.

Keep Your Portfolio in Step with Your Goals

The performance of different types of investments throughout the course of time, however, can change the balance of your portfolio. So it’s important to review holdings – and make adjustments as needed – to help you stay on course. While it can be tempting to let assets that are doing well become a larger part of your portfolio, the chart below shows how being disciplined about rebalancing may reduce your risk.

Portfolios that are rebalanced even once a year have been less volatile than portfolios that have not been rebalanced.