How Often Does My Portfolio Need to be Reviewed?
You should have your portfolio reviewed if your life circumstances have changed. For example, have you had an increase or decrease in income or expenses? Has your health or marital status changed? Have your goals and objectives changed? How about your attitude toward risk? If any of these things have changed you need to review your asset allocation. If you were told that your allocation was “fine” six months ago, most likely you are still fine. However, in today’s uncertain market and economic environment, it’s quite possible to have a much different attitude toward risk, or a different job situation, creating a legitimate need to review your portfolio.
If your attitude toward risk has changed, do not feel compelled to take action just for the sake of taking action. Be careful not to make investment decisions out of fear of what will happen. For example, if you’re selling now out of fear that prices will fall, you could be proven wrong, meaning that you will feel compelled to jump back in after prices have risen. Or worse, you may not ever get back in. And there will be tax consequences to consider. As far-fetched as it sounds, we have spoken to quite a few people who sold everything in 2008-2009 and are still 100% in cash, stricken by “paralysis of analysis.” Generally speaking, the gut-reaction emotional response is the worst financial decision. If you cannot handle volatility, consider working with an objective independent investment adviser who does not mix emotions with financial decisions.
To have your portfolio reviewed, contact Ariba at www.aribaasset.com or toll-free at 1-800-808-7488.
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