Investment Portfolio Management: A Key to Staying on Track

To many people, investment management simply means tracking performance. But it’s that and so much more. It involves continually evaluating and adjusting your portfolio based on your goals, risk tolerance, time horizon, and market conditions.

So whether you do it yourself or hire a professional, ongoing investment management is an essential part of helping to keep your portfolio on track.

Assess Your Situation

Effective investment management starts with information. Asking questions like the ones below may help you determine if your portfolio is positioned appropriately.

• Have your goals changed? Do you need to reprioritize? Your goals play a big part in how you allocate the funds in your portfolio. Based on what you’re trying to accomplish, you may invest for income, growth, or a combination of the two. Your goals tend to change as you move through life, so the ones you had when you first selected your investments might not be the goals you have now. For example, the birth of a child may spark the desire to set up a college fund.


• What are the market conditions? Does your current asset allocation reflect your risk tolerance? Over time, your portfolio may stray from your target allocation due to market fluctuations. It could become more aggressive or conservative. You might also find your investment style shifting as you get older. Generally speaking, you want a portfolio that reflects where you’re at in your financial journey and won’t keep you up at night.


• Has your time frame changed? Do you need the money sooner or later than expected? Your time horizon may impact your investment decisions. For example, sudden medical expenses or job loss may create an immediate need for funds.

Take Action

Through your responses, you may uncover new investment needs, gaps in your asset allocation, over-weightings in certain securities, or other issues—all of which are important to know when managing your investments. Armed with this information, you can then take the necessary steps to update your portfolio, which might include:

• Selecting different asset classes or shifting money among existing ones
• Rebalancing your portfolio so it reflects your target allocation
• Increasing an existing stock position or trimming exposure to a particular company or sector 
• Opening an education savings account such as a 529 College Savings Plan
• Increasing your retirement plan or IRA contributions  

Your life is ever evolving, and it’s important that your portfolio changes with it to help you stay on track for the future you envision. And while ongoing investment management can’t guarantee you’ll live the retirement you want, it could potentially go a long way in helping you pursue your goals.