Keeping an eye on your investment portfolio helps you notice if funds have closed. “If stocks, bonds, and other assets are all performing poorly, it could signal issues with asset allocation that need addressing.” Ongoing Fund Closures or Manager Departures Poor returns across multiple asset classes are a cause for concern,” he said. “If the portfolio is no longer aligned with goals, it may need rebalancing. As an investor ages, their risk tolerance may decrease, said Rikin Shah, CEO of GetSure, a nationally-licensed insurance agency and financial services advisor. Changes in Risk Tolerance or Investment GoalsĪnother red flag could come with age, as your risk tolerance changes. Uncertainty about your comfort level of risk or lack of knowledge about an investment horizon means you need to get more financial education by speaking with a finance professional. “Everyone should be able to describe the primary goals of their portfolio and how much risk you’re willing to undertake to achieve those goals,” Stroup said. One red flag you might not even think of has to do with your own approach to your portfolio. “A diverse range of assets helps to mitigate market downturns, maximizing long term earnings and capital gains.” “Diversity is the golden rule of a resilient and flexible portfolio,” Stroup said. Too much of one kind of fund can hold back your money’s growth. The term “don’t put all your eggs in one basket” is perfect for investing. I’m a Self-Made Millionaire: These Are the 6 Investments Everyone Should Make During an Economic Downturn Lack of Diversity Ultimately, you are in charge and can ask your advisor or portfolio manager to make changes that help meet your benchmarks. “Compare the largest three segments of your portfolio to an appropriate benchmark to get a sense of how they have performed against broader unmanaged market indices,” Stroup said. If your portfolio seems to be performing below what you expected or were promised, this could be a red flag. Keeping this cost low can benefit your portfolio over the long run.” Subpar Performance The average expense ratio for a mutual fund is 0.5% to 1%. “Scan your quarterly statement to get a quick sense of what you’re paying and whether you can reduce those fees. You could be missing fees by not paying closer attention, according to Christopher Stroup, CFP with Abacus Wealth Partners. Many people hand the work of their investment portfolio over to an advisor or company and just review their statements once in a while to see how things are going. In order to stay on top of your investments, experts say to be aware of these nine red flags when you check your investment portfolio.
Learn: 3 Things You Must Do When Your Savings Reach $50,000 If you’re not regularly reviewing your portfolio, there are a number of things that could be happening to eat into the growth of your funds over time.Ĭheck Out: 10 Stocks That Could Be the Next Apple or Amazon
ABACUS EXPENSE MANAGEMENT PROFESSIONAL
When it comes to investing, most people are either actively involved in their portfolio’s management, or have a financial professional who handles it.
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