Thoughts from an expert in finance on analyzing your investment objectives
It’s a good time to review your investment objectives and determine if there are changes that need to be made…with that, here’s some Questions to Ask:
The five key investment objectives
(1) Is the current portfolio diversified across different asset classes, eg. Domestic and International, Industries: technology, manufacturing, real estate, services, etc. Diversification reduces the risk in the portfolio.
(2) If I anticipate taking distributions is there enough liquidity (cash) so that I do not have to trade at an inopportune time and be required to sell low.
(3) Have there been any changes in my goals or objectives with respect to my investments? eg. I anticipated having to support one of my unemployed children however this is no longer a financial need.
(4) Do I have one investment that has outperformed the others and is now a very large portion of my account? Do I therefore need to reduce the size of this investment and reposition the assets in the account—we call this rebalancing the investments and this should be reviewed no less frequently than annually.
(5) The current market conditions are very volatile and I find it difficult to accept the variations in my investments and would prefer a little more conservative approach. Some adjustments may be necessary to reduce the volatility in the account.
Nancy J.Hite, CFP®, CWS®, ChFC, CLU, RFC
President & CEO
Certified Financial Planner, Certified Wealth Strategist, Future Income Planner, Public Speaker
What are your investment objectives? Tell us in the comments section.
About The Author
Nancy J. Hite, CFP®️,CWS®️,ChFC, CLU, RFC a Fiduciary and founder of The Strategic Wealth AdvisorTM LLC offers financial advice and coaching to help clients prepare and enjoy the next chapter of their lives without financial worry.