- December 2, 2019
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With the start of 2020, this signals the end of one chapter and the beginning of another. For the investor, the same rules could apply. The beginning of a new year is a great opportunity for investors to reassess their portfolios and make adjustments.
Here are some tips to help you restrategize your portfolio for 2020:
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Streamline Your Investment Strategy: The last twelve months will likely tell you what worked and what didn’t. For example, assess how your investments performed this year. You may decide to readjust your risk tolerance and decide to reduce or increase it in the next calendar year for better returns. This is also a good time to assess your own investment performance. Did you start the year regularly adding money to your portfolio and then trail off? Are you investing enough in your retirement? Once you have identified points for improvement and/or readjustments, document and plan out your investment strategy for the new year.
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Diversify: The end of the year is also a good time to ensure your investment portfolio is diversified. Diversification reduces your investment risk by ensuring you’re not overly exposed to any individual investment. This means that your portfolio is not comprised of one kind of investment but includes assets like stocks and bonds, and categories within each. Now is a good time to assess your exposure level and look at ways to diversify your portfolio if necessary.
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Schedule regular check-ins: Just like New Year’s resolutions, your annual investment plan could go out the window by April if you are not committed to following through. Scheduling ‘check-ins’ with your investment manager is a good way to create accountability and help you stay on track. Put these appointments on your calendar. How often is up to you, although once a quarter may be sufficient.
Here’s the good news: The last twelve months provided you with some teachable moments that can help you improve your portfolio going forward. Take the time now to identify and learn from these moments. Together with an investment manager, restrategize your investment plan for a better performance next year!