Tuesday, February 28, 2012
PORTFOLIO CHECKUP: STEP THREE
9:05 AM | 
Posted by
pensionfinancialservices |
Continuing our excerpts from a 2012 piece in Fidelity Investor’s Publications four-step guide to “evaluating your investments and performance.” Step 3 takes up individual holdings.
“While keeping the overall diversification of your portfolio in mind, you can consider making adjustments to individual securities. The answer to the question of what to sell and where to reinvest will be different for each investor. That said, the following principles can help you determine where to make adjustments that fit your personal goals.
“Start with any individual stocks you hold. Check whether the companies have performed up to your expectations, and consider whether your outlook for them remains positive. Also review the stock’s valuation to make sure it is still reasonable.
“If you have individual bonds in your portfolio, you should include a review of your holdings in your checkup. Be sure to review:
· “Credit rating: Check to see if the ratings of your bonds have changed. If analysts have downgraded any of your holdings, it may mean your portfolio has taken on a higher level of risk.
· “Duration: As your bond holdings approach maturity, the duration of your portfolio may change. You should review this in light of your changing investment goals and the interest rate environment, and take it into account if you are reinvesting in bonds.
Next, evaluate the performance of your mutual fund holdings relative to their peers.”
The next post concludes the four-step guide by considering a “Plan for the Future.”
“Don’t forget,” says Kevin McCormack, President, Pension Parameters Financial Services, “as you prepare to file your 2011 tax return, it’s an ideal time to take a moment and call your retirement planning advisor, to help ensure that your goals are aligned with your comfort level for the balance of this year.”
To set up an appointment with Pension Parameters, call 212-675-9360 or 732-583-1313.
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