After you’ve set up your investment strategy, periodically monitoring your portfolio might make sense.

You've Got an Investment Plan, But Are You Monitoring It?

Let’s say, financially speaking, you’re all in. You’ve developed financial goals, put together an investment plan and created a portfolio with the right mix of investments. Now the next question: Have you looked at your portfolio lately?

You probably can count on your portfolio looking different a year from now than it does today. And that might not be a good thing for your overall plan.

“For a long-term portfolio, day-to-day monitoring could cause you to diverge from your plan,” said Joe Correnti, senior vice president of brokerage product at Scottrade. “But periodic monitoring can be an important step toward making sure that your portfolio and your goals remain on the same page.”

Here is a checklist of some, but not necessarily all, items to consider as you monitor your portfolio.

Check Your Portfolio’s Characteristics

Asset allocation: As part of your plan, you allocated certain percentages to cash, equity and fixed income, perhaps basing the ratios on an asset allocation model. If you never make changes, it’s likely that your percentages in each asset class will move considerably from your target as market and business cycles come and go. So the first step is to check your asset allocation to see how it compares to your target.

Investment style and size: Style refers to whether a company is expected to grow faster than its peers (growth) or slower (value). Size refers to whether a company is large, medium or small. As part of your monitoring, you should consider checking whether your portfolio has drifted from your original style preferences. Individual securities can evolve between growth and value, as can mutual funds and exchanged-traded funds.

Sector: Performance of one sector (such as real estate or utilities) over others may lead to it becoming larger or smaller than your desired weighting. You might want to make sure your sector target percentages are intact.

Geographic: Do you want to keep a certain percentage of your assets in international securities? Do you favor a certain country? Monitoring the changes in these assets can let you know whether you’re maintaining your desired exposure.

Top holdings: You probably have a pretty good idea of what you hold when it comes to individual stocks. But have you checked the top holdings of your mutual funds and ETFs? If the top holdings in those funds match some of your individual stocks, you could be unintentionally overexposed.

Question: How often do you monitor your portfolio?

Next Step: Scottrade clients can log in to determine whether they are overexposed to a particular security by using the X-Ray function in our Portfolio Review Tool. Not a client? You can find the top holdings of mutual funds and ETFs on our Quotes & Research page.

All investing involves risk. The value of your investment may fluctuate over time, and you may gain or lose money.

Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market.

The information and content provided is for informational and/or educational purposes only. The information presented or discussed is not, and should not be considered, a recommendation or an offer of, or solicitation of an offer by, Scottrade or its affiliates to buy, sell or hold any security or other financial product, or an endorsement or affirmation of any specific investment strategy. You are fully responsible for your investment decisions. Your choice to engage in a particular investment or investment strategy should be based solely on your own research and evaluation of the risks involved, your financial circumstances, and your investment objectives. Scottrade, Inc. and its affiliates are not offering or providing, and will not offer or provide, any advice, opinion or recommendation of the suitability, value or profitability of any particular investment or investment strategy.

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