Spring cleaning of your financial portfolio - WRAL

The economy had a difficult year with persistent inflation and rising interest rates. The S&P 500 has lost more than 18% in 2022, according to Forbes.

In volatile markets, it is crucial for you to keep track of your investments. Whether you manage your financial portfolio yourself or entrust it to experienced advisors, here are some tips for cleaning up your investments.

Conduct annual reviews

If you tend to throw away quarterly reports or monthly summaries without reading them, you may be missing out on which of your assets are doing well and which aren't.

"It's a good idea to regularly review your portfolio," said Grant Walker, vice president and chief investment officer at Collegiate Capital Management . "Your personal circumstances, tax laws and economic conditions change, and often these changes justify adjustments to your portfolio."

The U.S. stock market is in its fourth bear market of the 21st century, which means many stocks are down 20% from their highs in the fourth quarter of 2021. Although now is not a good time to sell if your stocks have fallen, an investment advisor can help you identify weaknesses and strengths in your portfolio to inform your investment strategies going forward.

"Evaluating the performance of your portfolio isn't easy," Walker said. "You have to know what you're comparing yourself to. 2022 is a classic case. In 2021 almost everything went up. If you managed to avoid big losses last year, then your investments are probably doing well. It really depends on what your money is invested in. ".

Assess your risk

If you've experienced changes in your job, lifestyle, or family, your long-term goals may have changed as well.

For example, as you approach retirement age, it may be time to move from a moderate-risk position to a more conservative position. This can mean switching from stocks to cash, savings accounts, and bonds. If you recently got a raise, you should talk to an investment advisor about investing some or all of the extra money.

"With the recent significant hikes in interest rates, it's especially important to check your accounts to make sure you don't have money frozen at very low rates," Walker said.

Check your transactions

Identity theft, fraud and scams are on the rise, allowing even the most secure accounts to be compromised. That's why it's important to review your transactions regularly, be alert for suspicious activity or errors, and speak to your advisor if you have any questions.

Think about new strategies

While the easiest way to manage your accounts is to leave your money in a long-ignored savings account or 401(k), it's probably not the most financially efficient method. If you have multiple retirement or savings accounts, consider combining them into one brokerage account to better track your performance.

"A brokerage account is a package where you can create different types of assets and get consolidated reports," Walker said. "It's a way of holding investments. Instead of going to all the separate components, you have one place to provide all your account reports and tax documents without having to interact with more than one entity."

Another financial strategy is to hire an investment advisor who can review all of your holdings and help you find ways to invest your money more effectively.

"A lot of people have accounts that opened a long time ago and haven't reviewed their investment options since then," Walker says. "An independent financial advisor can provide independent advice. Many retirement accounts are not set up as effectively as possible."

Small steps like these can now guarantee big effects for a happier and more financially secure future.

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