The Importance of Reviewing Your Investments

Apr 11, 2025

When was the last time you reviewed your investment plan? If it’s been a while, it may be time to look over your portfolio and make updates if needed.

Why Review?

Regularly reviewing your plan is an essential of having a plan. It’s a good idea to look over your investments at least once a year to make sure they’re all performing adequately and that you’re on track to meet your goals – though you may decide to review them more often.

Marriage, divorce, the birth of a child, the death of a loved one, buying a new home and other major life events can also affect your plans and end goals. For example, if your family has changed, you might update the beneficiaries on your accounts or be more aggressive with your investments.

Changes in the economic market can also prompt you to review your plan. A recession might necessitate more conservative investments, but a thriving market might encourage you to be more aggressive and take on more investment risk.

Steps to Consider

First, you’ll want to gather all your account statements in one spot. If you don’t already have a list to help you keep track of your different investment accounts, take the time during this review to make one.

Look over the performance of any stocks, bonds, brokerage accounts, IRAs or other types of investment accounts you may have. We recommend looking back at least a year to spot any larger trends. Are all your investments generally growing over time?

If something is seriously underperforming, it may be time to invest those funds into a different account. But keep in mind that investing is a marathon, not a sprint. It’s normal for investments to occasionally dip with the changing market before resuming their growth. That’s why it’s crucial to look at long-term performance before deciding to make a change to an investment.

We also recommend taking the time to assess the general mix of your accounts and holdings. Your exact mix of riskier (but higher earning) investments and safer (but slower growing) investments will differ depending on your age, goals and risk tolerance. Regardless, you should have at least some diversity.

Changing the diversity of your portfolio is known as “rebalancing.” Here are some qualities you may want to review:

- Sector: This refers to which part of the economy you’re investing in. As the old adage says, don’t put all your eggs in one basket! We wouldn’t recommend tying most or all of your investments to one single industry, even if you’re investing in several companies within that industry.

- Style: Just as you want diversity in market sector, you may also want diversity in the kinds of investments you’re holding. For example, your portfolio may include stocks, bonds, CDs, money market accounts, real estate and more. Having a variety of investment strategies, such as growth or long-term value, can help minimize your overall risk.

- Size and Location: Different companies and different geographical locations can all react to the market differently. You may even want to consider some foreign investments or holdings to diversify your portfolio further.

Help When You Need It

Managing your investments, especially if you have a diverse portfolio, can feel overwhelming or complicated at times. If you’re unsure about your next steps for your future, don’t be afraid to ask for help from a professional.

Honda FCU members have access to experienced investment professionals that can help you review your current plans and adjust them after life events or other changes in long-term goals. We are here for you!

Links:

https://www.hondafcu.org/investment-retirement/investment-and-retirement-planning