At Elite Wealth Management, we offer comprehensive financial planning assistance that is tailored to your personal situation. William Holliday is a financial planner in San Diego who advises clients in southern California. His aim is to provide the information, including portfolio reviews, and answer the questions needed to create a practical, well defined, financial plan. Regular Portfolio reviews are an excellent opportunity to assess your progress toward your financial future. They provide a chance to check that your portfolio hasn’t drifted away from asset allocation that best matches your risk tolerance and timeframe. Here are 5 reasons you should have a portfolio review regularly:
- Asset Allocation
- Portfolio Overlap
- Concentration Risk
- Beneficiaries and Other Housekeeping
Below we will take a deeper dive into each reason.
You should regularly examine your asset allocation, especially if you maintain several accounts at different asset managers. Regular movements of investment markets can cause fluctuation in asset class performance and can cause your portfolio to drift from its original allocation. Also, the individual asset managers may not be aware of the accounts you hold outside their influence. If that is the case, you must act as the overall portfolio manager and rebalance as necessary.
In cases where you use several asset managers, they might invest in the same or similar asset classes or individual securities. Check to be sure you aren’t over in certain sectors or individual securities, as this can increase the risk of volatility in your portfolio.
You may have a legacy position that you acquired through inheritance or your job that has become a large percentage of your portfolio, and the concentration can increase the risk profile of your overall portfolio. Or perhaps you are a traditional buy-and-hold investor; over time, some positions have increased in size and pose a concentration risk. A review can help you determine whether these holdings are still appropriate or if alternative options might be better. The review also notifies you of the tax consequences of making a change.
A review of your portfolio can uncover potential ways to reduce the taxes on your investments. For example, you might not be choosing the best type of account to hold specific securities based on their tax treatment. It is advisable to hold securities with high dividend yields, taxable bonds, or even certain mutual funds in deferred tax accounts to avoid immediate taxes on the income.
Beneficiaries and Other Housekeeping
Reviewing the beneficiary information as part of your regular portfolio review is very important to ensure your assets are passed on correctly upon your passing. Ensuring that these beneficiary designations are accurate is a vital part of a regular portfolio review. It is also a good idea to check the registration titles on your accounts. You might have updated your trust and forgot to update the titling of your investment accounts.
Are you ready for your portfolio review? William Holliday and the Elite Wealth Management team are happy to advise you towards creating a comprehensive financial plan that is just right for you. Contact us by calling (323) 314-0202 or clicking here.