Getting started
Reviewing your investments
Track your progress instead of the market
Whether you manage your own investments or rely on your financial professional for an update, it’s always a good idea to monitor how the investments in your portfolio are doing. That’s the best way to avoid an unwelcome surprise that could throw you off-track and delay you in reaching your investment goals.
Eyes on the finish line
When you frequently check your investments, it’s easy to lose your long-term perspective. That’s especially true when you look at your portfolio on a day when there’s been a big move in a market index such as the S&P 500. Checking at the end of each quarter keeps you in the loop while retaining your long-term perspective.
Big-picture view
Consider reviewing all your account statements at the same time, rather than as you receive them. If you use different accounts for the same goal, for example an IRA and a 401(k) to invest for retirement, you may need to refer to multiple statements.
Time for a change?
When it comes to investment results, it’s all relative. If you’re considering making a change after a few disappointing quarters, start by comparing that fund to others with similar investment objectives. Look at how your current investment measures up to its peers over longer time frames. But remember, selling investments may also increase your tax bill.
What and when to evaluate
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Quarterly
Monitor your progress by:
- Comparing individual investments to the average for that fund category
- Noticing a significant increase or decrease in dividends, especially if you rely on them for income
- Considering rebalancing your portfolio if it has strayed meaningfully from your target asset allocation
90 days isn’t a lot of time in the market, especially if you’re investing for something big or a long-term goal.
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Annually
Help keep your portfolio on track by:
- Rebalancing your portfolio to reflect your asset allocation strategy
- Re-evaluating any funds that consistently lag their peers over the long term
- Increasing your investment if your portfolio is not on track with your goals
- Planning for any upcoming life changes such as the birth of a child, which would affect your investment goals
Your annual portfolio review is a good time to gauge your progress against your investment goal. Because all investments don’t grow at the same rate and can lose value, there’s a good chance you’ll want to rebalance your portfolio.
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At any time
Adjust your portfolio and/or contribution rate to reflect any significant life changes such as:
- Changing or losing a job
- Having a child
- Inheriting money
- Reaching a shorter term goal such as buying a home
Big life changes can come at any time. A shift in your financial situation may mean you need to re-evaluate your risk profile or change how much you contribute to your retirement account.
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Keep your perspective
Sometimes there’s a fine line between staying informed and micromanaging your portfolio.
Learn more about investing
Now that you know how to review your investments, explore these other important investment concepts.
Standard & Poor's 500 Index is a market capitalization weighted index based on the average weighted results of approximately 500 widely held common stocks. Standard & Poor’s 500 Composite Index (“Index”) is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Capital Group. Copyright © 2022 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part is prohibited without written permission of S&P Dow Jones Indices LLC.
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