Discover What You Already Own
Maybe you can name all of your stocks and funds off the top of your head and detail how each one performed last week. That's great – in the sense that it means you're paying attention to your portfolio. But can you explain how they work together? Which are your core investments? Are you diversified? Does your portfolio have a lot of overlap? You need to be able to answer those questions before you can see how (or even if) your portfolios fit your strategy.
To figure out exactly what you own, you could buy a financial calculator or investing spreadsheet, thoroughly review the prospectuses for all of your funds, review the latest shareholder and research reports for each of your stocks, and calculate how much they have (percentage-wise) in cash, bonds, and various types of stocks (large, mid and small cap, international, etc.). What a job!
Rather than go through that process, you can use Scottrade Portfolio Review Tool, our free asset allocation tool, to perform a lot of this work for you. With Portfolio Review Tool's X-Ray Analysis, Portfolio Concentration, and Current Allocation breakdowns, you can see how your portfolio is allocated and identify the areas in which you may need to increase or decrease your exposure. These tools help you take a look at your portfolio's asset mix, style-box breakdown, sector weightings, regional exposure, and much more.
Read Next: Make Your Portfolio Align with Your Strategy
Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market.