How often should I review my investment portolio?

Investment portfolio review on a screen

Ask the expert at Smith & Pinching about reviewing your investment portfolio - Credit: Getty Images

I have about £200,000 invested in a portfolio that I’m using to build my overall net worth. The money has come from excess earnings from a contract job I had a few years ago and an inheritance. I also have pensions, which I’m continuing to build up. I’m concerned that the portfolio isn’t protected at all against falls in the market. My adviser and I review it once a year but I think it needs reviewing more often than that. How frequently do you think I should review it?

Financial adviser sitting at a desk

Douglas Bridges, Independent Financial Adviser with Smith & Pinching, advises on putting funds aside for an emergency. - Credit: Smith & Pinching

Douglas Bridges of Smith & Pinching responds:

You are right that the value of your investment portfolio will go down as well as up as markets change and that regular reviews of your portfolio are essential to ensure that your plans remain on track. How frequently those reviews should happen will depend on a number of factors, but certainly once a year should probably be the absolute minimum.

I hope that your investment portfolio is aligned with your investment risk profile, so that you are taking no more risk with it than is comfortable for you. If you feel unhappy about how much your portfolio might go down in value, it may be that you should be taking a lower level of risk. However, rises and falls will happen so if your investment objectives are looking at the longer term, you may feel that it is worth taking a little more risk at this stage in order to have the potential to see greater potential increases in value. This is a conversation you should be having with your adviser at every review.

Discretionary portfolio management is a service where you devolve responsibility for the ongoing management of your portfolio to investment experts, giving them the authority to make changes to the content of your portfolio as and when market changes indicate they are needed, within your risk profile and other agreed preferences.

For larger portfolios, this can be done on a bespoke basis but, for many investors, management can be carried out cost-effectively using model portfolios. These are investment portfolios that are designed to align with a specific risk profile that can be matched with the investor. These portfolios are regularly 'rebalanced' within the parameters of the risk profile so are adjusted as needed to maintain optimum performance.

Portfolio management can be offered by a third party working alongside your financial adviser, or – as is the case with Smith & Pinching – it can be an integral part of the investment advice service offered by your financial advice firm.

Any opinions expressed in this article do not constitute advice. The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.

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