Personal Finance Guide

Posts Tagged ‘asset mix’

Step Five: Monitor Your Results.

Financial Planning in Personal Finance is an ongoing process. Your financial needs and financial objectives will change throughout your life, and you should adjust your investment portfolio to reflect these changes.

At least twice a year, monitor two aspects of your investment portfolio:

1. Asset mix.

Be sure you are comfortable with your combination of stocks, bonds and cash. Perhaps stocks have performed so well that they now represent more of your portfolio than you originally intended. You may want to shift your holdings accordingly.

2. Performance.

Monitor the performance of investments that fluctuate in value. This involves calculating the gain or loss in each investment. Keep in mind your time horizon; if you’re investing for the long term, give the investment time to grow. Also, check the performance against a comparable benchmark. For example, if you own mostly conservative stocks, compare their performance with a conservative index, such as the Dow Jones Utilities Index.

Understanding investments and establishing a regular investment program are essential to successful Financial Planning for all investors. The best way to achieve your Financial Goals is to have a well-thought-out financial plan that is reviewed regularly by you and your financial advisor.

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