How You Can Tackle Your Midyear Investment Review

Most people generally review their investments once a year. But many things can happen over the course of 12 months that might impact your investment portfolio. Check out three reasons to consider a midyear investment review. checkup: investment portfolio
5 min read
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Key Takeaways

  • See if your portfolio is still aligned with your risk tolerance and goals and make necessary adjustments to stay on track
  • Identify opportunities to reduce taxes and increase potential savings
  • Adjust your financial plan to reflect any life events that may effect your goals 

A financial portfolio checkup can be an effective way to measure progress toward your goals. They can show you what’s working well and uncover issues you may need to address. Many “buy and hold” investors generally review their investments once a year. However, it’s also important to consider doing a midyear portfolio checkup. A variety of things can happen in six months that might impact your portfolio, including market developments, tax law changes, and significant life events such as marriage or the birth of a child. 

Depending on your investing style, you may choose to do the review yourself, or you may want to work with a TD Ameritrade Financial Consultant who can walk you through the process and help you assess your investments.

Whether you go it alone or work with a pro, here’s how a midyear portfolio checkup could help you manage your portfolio.


1. Assess the Impact of Market and Economic Events 

The first few months of 2019 have seen fairly steady gains and low volatility, but many investors are on guard for when calm days may end and volatility could spike. With that in mind, investors may want to reconsider their portfolio allocations. For example, they may want to adjust their proportion of stocks and bonds to become more conservative or aggressive, depending on how they think the market is faring and what their goals are.

Interest rate changes affect the performance of stocks and bonds, which in turn could impact the value of your investments. The Federal Reserve raised rates three times in 2018, and many analysts do not expect any more increases this year. Still, the possibility is worth keeping in mind.

A midyear portfolio checkup could help you determine if your asset allocation is suited for your goals, and if your portfolio is positioned for a potential rate change. It might also reveal if you’re potentially overweighted in a particular asset class or sector given the current market conditions. 

Based on your findings, you might consider:

  • Rebalancing your portfolio so it reflects your target allocation
  • Incorporating investment strategies to help weather changing interest rates
  • Adjusting your position in a sector or asset class
  • Setting up alerts to help monitor securities in your portfolio (TD Ameritrade clients can log in to their account to create the alerts)

If you don’t enjoy following the markets, you may want to consider a managed portfolio solution offered by TD Ameritrade Investment Management, LLC. With a managed portfolio, financial professionals monitor your investments on your behalf and rebalance the portfolio as necessary. 

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2. Identify Tax and Investment Opportunities

Familiarizing yourself with any changes to tax rules now gives you time to update your tax and investment strategies before year-end. You may want to contact a tax professional to discuss your personal situation. 
  • Tax brackets and rates. Your tax rates depend on your tax bracket, which is determined by your income level. If you expect to have more money in your pocket than you did last year, you might want to use the extra cash to build your emergency savings fund, pay down debt, or put it toward another goal like retirement. On the other hand, if you expect to pay more in taxes, you might decide to contribute to a traditional IRA instead of a Roth. You may be able to deduct the contributions and potentially lower your current tax bill. For 2019, IRA and 401(k) maximum contributions for individuals have increased to $6,000 and $19,000, respectively. 
  • Standard and itemized deductions. The standard deduction for couples filing jointly nearly doubled last year to $24,000 ($12,000 for individuals). There were also lower limits for state and local income tax deductions and mortgage interest deductibility. Individuals affected by last year’s changes may want to take a closer look at how they file for this year, as it may no longer make sense to itemize your deductions. Calculating the charitable donations you’ve made so far in 2019 as well as any deductible expenses you’ve incurred may help you see where you stand relative to the $24,000 threshold. You can then decide if you want to take any steps to potentially boost your itemized deductions before December 31.
  • 529 plans. Although they’re still called college savings plans, 529s are no longer just for college. Under the new tax law, you may be able to take out up to $10,000 a year tax-free from a 529 plan to cover K-12 tuition expenses for private and religious schools. Some states still do not recognize these new federal tax benefits so you are  encouraged to consult a qualified tax advisor about your personal situation and how these changes may affect you. This may be something to consider depending on the educational needs of your loved ones.
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3. Adjust Your Financial Plan to Reflect Life Events

Have you experienced a significant event like marriage, the adoption or birth of a child, the death of a loved one, or taking on a new job within the last six months? If so, it’s important to make sure your financial plan aligns with your new situation. A midyear portfolio checkup can help you determine the types of changes you might need to make. You may want to:

  • Reprioritize your savings goals
  • Reallocate your investments among different asset classes
  • Purchase life insurance
  • Start a college fund
  • Update your will and beneficiary information

Life can get pretty hectic and cause your portfolio to fade into the background. But it’s important to schedule time to review your investments. It’s really the only way to know if you’re making progress toward your goals and to identify potential opportunities to help boost your savings.

If you’re a TD Ameritrade client, consider kicking off your review by logging in and checking your account. It's also a good time to name or update a beneficiary to ensure your assets are directed to the people or charities you chooseYou may also want to consider scheduling a goal-planning session with a TD Ameritrade Financial Consultant who can help you evaluate your existing financial plan or work with you to create one that’s tailored to your needs. 


Key Takeaways

  • See if your portfolio is still aligned with your risk tolerance and goals and make necessary adjustments to stay on track
  • Identify opportunities to reduce taxes and increase potential savings
  • Adjust your financial plan to reflect any life events that may effect your goals 

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