Spring cleaning is not just something that takes place around your home. It is the perfect time of the year to examine your investment portfolio and make any adjustments for the remainder of the year. If you are ready for your investment portfolio review, Brockmeier Financial has all the tips and tricks to help you make the right decisions to meet your financial goals.
Things to Keep in Mind as You Refresh Your Portfolio
1. Evaluate Your Goals
The main thing to focus on when you are making your plan for the year and reevaluating your portfolio is your financial goals. If your goals have changed throughout the year, you should mention the changes to your financial advisor. For example, if you plan to purchase or refinance a home in the next year, you will need to keep an eye on the mortgage rates in the market and review the potential terms of the purchase or refinance with your advisor. Your plans to make a major purchase or refinance will likely impact your current financial plans.
2. Review your Retirement Accounts
Just like you should be taking a look at your retirement accounts at least every year, if not more often for rebalancing, you should do the same for your investment portfolio. You should plan to take a look at this quarterly to ensure you have a diversified portfolio and are taking advantage of the right investment opportunities. As part of your review, you can examine your current holdings to make sure they still align with your goals. You should also review your current cash flow. You want to make sure that you are planning for all of your expenses as well as allocating enough of your income to your savings accounts, retirement accounts, and other various accounts you may have. This is where it is key to know what your upcoming expenses or financial goals are so you can plan accordingly with your financial advisor. You want to make sure that you have enough allocated for your goals and also have some flexible liquidity in case you need it for a rainy day.
3. Verify Any Required Minimum Distributions
Lastly, you want to make sure you are taking any required minimum distributions (RMDs) from any qualified plans or IRAs if you are over the age of 72. You will need to begin taking your RMDs each Spring (by the 1st day of April) in the year that you turn 72. If this applies to you, your financial advisor should have already reviewed this and assisted you through the process but in case that has not happened yet, it is a good thing to keep it on your radar. After your first RMDs, you will need to take any subsequent distributions by the 31st of December every year. If you would like any more information on this process and what it looks like for you, be sure to connect with your financial advisor.
4. Review Your Investment Performance
It is also important to review how your current investments are doing. Not all investments will be home runs and when you are keeping an eye on them, you can make any adjustments needed to improve your overall portfolio returns. It is also a great time to examine the current diversification of your portfolio. Especially when the market is down or volatile, you want to have a diversified portfolio that includes several asset classes and holdings. This is the best way to reduce the loss risk in a single asset or sector in the market.
5. Consider Any Life Changes
Our lives also have an impact on our financial plans. If you have a change in your personal circumstances, you may want to reevaluate how you are allocating your money and your overall portfolio. If you are expecting a life event such as a marriage, divorce, retirement, career change, or even children, you may also have a risk tolerance change and need to adjust as needed. You may also want to make sure you are taking advantage of any tax benefits that would apply to you. A quarterly review of your portfolio can help you take advantage of any investment opportunities that would be more tax efficient. Depending on your goals, it may be worth it to try to reduce your tax burden and this can be greatly impacted by your portfolio.
Review Your Portfolio Regularly
The market is always changing and can be volatile at times. This is not a reason to panic but it is a reason to take a look at your portfolio to know what is going on with your money and allow you to plan for some risk management. When you are in the habit of regularly examining your portfolio, you can determine the best bath and options for you to mitigate potential market changes that can have a negative impact on your portfolio.
Brockmeier Financial is here to help you stay on track for all of your financial goals. We are ready to start your investment portfolio review as soon as you are. We want to help you track your progress toward your goals and also make sure you are on track and have investments that align with what you are currently needing out of your portfolio. By scheduling a regular review of your diversified portfolio, you allow us to do as much as possible to keep that promise to you. Reach out to us today to get started on your financial spring-cleaning tasks!
Any opinions are those of Brockmeier Financial Services, LLC, and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of the strategy selected.