Reviewing your investment portfolios
Given the recent market volatility, we thought we would take the opportunity to remind clients what we do behind the scenes in managing their investment portfolios, and ensuring that each portfolio remains suitable during market periods such as these.
Although we have no control over investment markets, we review the investments within our clients’ portfolios, every month, to ensure:
- that the strategy/philosophy of the investment portfolio remains consistent with the reason it was chosen
- that the fund’s performance is in accordance with expectations. We expect certain funds may underperform their appropriate benchmark from time to time (eg: value (cheaper-priced stocks) have underperformed large stocks recently), but we want to make sure we understand the basis for any underperformance
- that the portfolio remains suitable in the current market conditions
To achieve this, on a monthly basis we undertake the following:
- performance assessment: check the performance of each fund, each asset group and the total portfolio performance against the relevant benchmarks
- maintain up-to-date knowledge of the investment fund strategy, which we achieve through presentation, technical papers and webinars
- keep up to date with new and alternative investment funds to ensure our clients’ portfolios are constructed with the most appropriate funds
As our clients know, before making any change to a portfolio, we take into account the costs of doing so, including transaction fees and capital gains tax issues.
There may be periods where there is no change to your portfolio for an extended period of time; however, we still undertake the steps outlined above - to make sure it’s still right for you. Where we recommend a change to your portfolio, we have considered it in light of the factors above, and the impact on your personal portfolio.
There may be more bad news and volatility to come but our disciplined rebalancing approach means that our client portfolios are always aligned to the risk that clients can cope with (and need to take) and the return they need to achieve their goals. Markets have always been uncertain (that is the risk that delivers the excess returns above safe investments); it’s just they are perhaps a bit more uncertain than in the immediate past.
Should you have any queries regarding your portfolios – particularly taking into account recent market volatility - please do not hesitate to contact us.
Tags: investment philosophy, investment review, Investment strategy