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You Should have a Portfolio Review

Regular Portfolio reviews are a great opportunity for you to assess your progress toward your financial future, and ensure your portfolio hasn’t drifted away from the asset allocation that best matches your risk tolerance and time horizon. Here are five important reasons to regularly review your portfolio:

  1. Asset Allocation
  2. Portfolio Overlap
  3. Concentration Risk
  4. Taxes
  5. Beneficiaries and Other Housekeeping

Below we take a deeper dive into each reason.


1. Asset Allocation

You should regularly examine your overall asset allocation, especially if you maintain several accounts at different asset managers. Regular movements of the investment markets over time can cause variances in asset class performance, and your portfolio may have drifted from its original allocation. Also, sometimes the individual asset managers may not be aware of the accounts you hold outside their influence. In that case you must act as the overall portfolio manager and rebalance as necessary.

2. Portfolio Overlap

In cases where you use several asset managers, it is likely they may invest in the same, or very similar asset classes or individual securities. Check to be sure you aren’t overweight certain sectors, or individual securities as this concentration can increase the risk of volatility in your portfolio.

3. Concentration Risk

You may have a legacy position that you acquired either through inheritance or your job that has become such a large percentage of your portfolio that the sheer concentration can increase the risk profile of your overall portfolio. Or perhaps you are a traditional buy and hold investor and over time some positions have increased in size and pose a concentration risk. A review can help you determine if these holdings are still appropriate, or whether alternative options might be a better choice, and the tax consequences of making a change.

4. Taxes

A review of your portfolio can uncover some potential ways to reduce the taxes on your investments. For example, you may not be choosing the best type of account in which to hold specific securities, based on their tax treatment. When possible, it is advisable to hold securities with high dividend yields, taxable bonds or even certain mutual funds in tax deferred accounts to avoid immediate taxes on the income. Many individual investors are also unaware of the benefits of selective tax loss harvesting to reduce the recognition of taxable gains.

5. Beneficiaries and Other Housekeeping

Reviewing the beneficiary information as part of your regular portfolio review is very important to ensure your assets are passed in the appropriate manner upon your passing. Checking to make sure these beneficiary designations are accurate is a vital part of a regular portfolio review. Also, it is best to check the registration titles on your accounts. You might have updated your trust and forgotten to update the titling of your investment accounts.


Are you ready for your portfolio review? YHB Wealth is happy to provide advice and counseling concerning asset allocation. Please fill out the contact form below to connect.

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