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We all know that the market changes all the time. So do life goals. That’s why Heather Pelant stresses checking-in with your investments from time to time to make sure you’re on the right track.
A colleague of mine used to say that reviewing her investments was like getting her teeth cleaned. She dreaded it ahead of time, but loved the feeling when it was done. It provided a sense of taking care of something important, both for today and in the future.
Like your teeth, your investment portfolio needs regular maintenance. For example, remember when you got that first “real” job—you know, the one you studied for in college and that paid benefits? You felt pretty good when you signed up for the company 401(k) and started investing for the future, and you’ve been contributing the max to take full advantage of the company match. Both were important steps to set you up for success.
But what’s happened in your life since then? Have you gotten married, bought a house, had a baby (or two or three)? Maybe those babies are closer to attending college or walking down the aisle. Perhaps going back to school to further, or change, your own career is in your plans. Has your investment plan kept pace?
Our 2015 Global Investor Pulse Survey found that ”winning” investors—those who have both savings and investments, a formal retirement plan, and less than 25% in cash holdings—didn’t just set it and forget it. They consistently take steps to adapt their investment plan in the face of changing markets and changing lives.
Don’t Set It and Forget It
Consider these healthy habits that the highly effective investors in our research had in common:
- Regularly review finances. Examine all of your investment statements together at least once a year. Are you getting the return you hoped for? How much are fees and taxes cutting into that return? How much money do you have in low-interest cash accounts? Are you properly diversified across asset classes, markets and industries? Think about whether you need to invest more money or make changes to your holdings to meet your goals.
- Spend time to get informed. BlackRock Chief Executive Larry Fink encourages all of us to be “students of the market.” That means keeping up with financial news and finding independent information about what is happening in the U.S. and global economies. Our blog is just one place where you can find easy-to-understand insight about what’s happening in the markets today and how it may affect you.
- Seek financial advice. Successful investors seek a trusted source for good advice. In fact, our Global Investor Pulse Survey found 81% of winning investors value professional advice, and 72% are most likely to consult a financial advisor. If you feel you don’t have enough money for a personal advisor right now, consider some of the digital advice tools or online resources, which are designed to help you decide where to invest your savings based upon your personal lifestyle and goals.
In short, as your life changes, so should your investment plan. By reviewing, reconsidering and rebalancing your portfolio regularly, you will position yourself for success. Moreover, that sense of being prepared and sure-footed about your financial future will make your smile that much brighter.