Analyzing Existing Investment Holdings

Learn how reviewing your existing holdings can help you determine if there is a gap in your ability to reach your goals.

The wealth management process focuses on your total financial situation; therefore, it’s designed to target the big picture. Once you’ve established your goals and objectives, the next step is to review your existing investment holdings and determine if there is a gap between your present situation and your ability to reach these goals.

In terms of adding value to your account, an investment is wise if its role in your portfolio can be justified by these three criteria:

• There must be a reason you own the position that can be explained by process and methodology
• The position must be consistent with your short- and long-term financial goals and needs
• You must feel comfortable owning it

Ultimately, this is an important aspect of developing a financial plan that more effectively meets your short- and long-term needs.

How Do I Know if My Investment Holdings Are Doing Well?

To determine whether an investment is “good,” most people look at its returns. They may compare, for example, the performance of the investment to an appropriate benchmark or index. This performance check analysis is almost always insufficient, however. When we evaluate your existing investment holdings, we look at the following:

• Suitability: Does the investment match your overall goals and objectives?
• Risk: Can you tolerate the investment’s volatility? What types of risk are you taking on by owning the investment?
• Relative performance: How has the investment performed relative to its peers?
• Asset allocation: How well is your wealth allocated among various noncorrelated asset classes?
• Specific investment detail: Have there been any changes in fund management? Does the investment yield match your income needs?
• Insurance fit: Do you own the right types of insurance and the proper policies?
• Estate planning, wills, and trusts: Are these documents recent and accurate, and do they reflect your intentions?

By reviewing all of your existing positions, you can make better sense of your current situation and understand how to make your desired future possible. 

How a Professional Advisor Can Help

Investors often buy products at one point in their lives but fail to sell them when they no longer make sense. What’s more, it’s common for investors to form emotional attachments to certain investments. Our job is to look beyond your rationale and assess what your portfolio is doing well—and what it lacks.

By putting your goals and investment holdings side by side, a financial advisor can start to make determinations about the next step—developing a plan that is specific to your needs.

Learn how to create a personal financial statement to report net-worth, cash-flow, and more. 

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