For most long-term investors, a detailed investment portfolio review once a year is a sensible starting point, with shorter check-ins during the year where necessary.
The important distinction is between reviewing your investment plan and constantly watching investment markets.
Checking your portfolio every day or reacting to every market movement can encourage short-term decisions that work against a long-term investment strategy.
A proper review should instead answer a more useful question:
Are my investments still doing the job I need them to do?
- Your answer depends on more than investment returns. Your goals, retirement plans, risk, fees, investment mix and personal circumstances all matter.
Here is a practical way to review your portfolio.
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Quick answer: When should you review your investments?
Consider a full portfolio review:
- At least once a year for a long-term investment strategy.
- When your circumstances change, such as retirement, marriage, divorce or inheritance.
- When your financial goals change.
- As you approach retirement, when income requirements and investment risk become important.
- When costs, investment choices or advice arrangements change.
- When your portfolio has moved significantly away from its intended investment strategy.
What you generally should not do is change your investment strategy simply because markets have had a difficult week or month.
1. Start with your financial goals
Before looking at individual funds or investment returns, go back to the reason you are investing.
Ask yourself: What does this money need to achieve?
Perhaps you are investing to:
- build sufficient capital for retirement
- generate an income in retirement
- grow long-term discretionary wealth
- fund education
- preserve an inheritance or
- achieve a combination of several goals.
Your portfolio should be assessed against these objectives. A portfolio can deliver a positive return and still be off track if it is not growing quickly enough to support the outcome you require.
Equally, a period of weaker returns does not automatically mean an investment is failing if it remains appropriate for your objective and investment timeframe.
For retirement investors, turn the goal into a numbe
“Saving for retirement” is a goal. Knowing approximately how much income your existing retirement savings could provide is a plan.
Use the Investonline Retirement Calculator to model your retirement savings, projected income and sustainability. You can adjust factors such as retirement age, income requirements, inflation, returns and contributions to understand how changes could affect your retirement outcome.
This gives your portfolio review an important reference point: whether your existing investment strategy appears capable of supporting the retirement you are planning for.
2. Review performance — but use the right timeframe
Investment performance matters, but it needs context.
One of the easiest mistakes investors can make is looking at the last six or 12 months and deciding that the best-performing investment is automatically the best investment.
Different asset classes and investment strategies perform differently through different market cycles.
Instead, ask: How has my portfolio performed over an appropriate long-term period?
Then consider: How does that performance compare with the objective of the investment, an appropriate benchmark and the level of risk taken?
For a long-term investment, short-term movements should generally carry less weight than whether the investment is fulfilling its intended role over time.
This is one reason frequent portfolio checking can be counterproductive. Markets naturally move up and down, and reacting emotionally to short-term volatility can turn a temporary market movement into a permanent investment decision.
3. Check whether your asset allocation still makes sense
Your asset allocation is the way your portfolio is divided between assets such as:
- South African equities
- global equities
- bonds
- cash and
- other investment assets.
It is one of the biggest drivers of the risk and return characteristics of your portfolio.
Even if you make no changes, your portfolio can change over time. Imagine equities perform particularly strongly for several years. They may eventually represent a much larger proportion of your portfolio than originally intended.
You may therefore be taking more investment risk without deliberately choosing to do so.
A portfolio review should check whether your current asset allocation remains appropriate for your:
- Goals, timeframe, income requirements and tolerance for investment risk.
Where appropriate, this may lead to rebalancing the portfolio back towards its intended long-term allocation.
4. Look at diversification
Diversification is about avoiding excessive dependence on one investment, asset class, geography or source of return.
This is particularly relevant for South African investors.
A portfolio concentrated almost entirely in South African assets can behave very differently from one combining local and global exposure. Conversely, simply investing offshore is not automatically a diversification strategy — the underlying assets and concentrations still matter.
During your review, ask: Am I properly diversified, or have I become unintentionally concentrated?
Look beyond the number of funds you own.
Owning five different investment funds does not necessarily mean you are well diversified if those funds ultimately hold many of the same underlying investments.
5. Review what you are paying in fees
Investment fees can appear small when expressed as a percentage, but they compound alongside your investment over many years.
That makes costs an important part of any portfolio review.
You should understand the combined cost of:
- Fund management, administration and financial advice, where applicable.
The cheapest investment is not necessarily the best investment. Value matters too.
The more useful question is:
- Am I receiving sufficient value for the total fees I am paying?
Compare costs alongside service, advice, investment performance, portfolio construction and the overall outcome you are receiving.
If you do not know what you are paying, that is itself a good reason to investigate.
6. Ask whether your financial advice is adding value
An investment portfolio review should not only examine the investments.
It should also review the advice surrounding them.
Good financial advice can include much more than selecting funds.
Depending on your circumstances, it may involve:
- retirement modelling;
- structuring your investments;
- managing income withdrawals;
- tax considerations;
- asset allocation;
- behavioural guidance during difficult markets;
- estate-planning considerations; and
- keeping your financial strategy aligned with changing circumstances.
Ask whether your current advice is clear, relevant and helping you make better long-term financial decisions.
7. Check whether your retirement plan is sustainable
Retirement deserves particular attention because your objective changes as you move from accumulating capital towards drawing an income.
Before retirement, an important question is: Am I saving enough?
During retirement, it becomes: Can my investments sustainably provide the income I need?
Your withdrawal rate, investment returns, inflation, fees and longevity all influence the answer. This means the portfolio that suited you ten years before retirement may not necessarily be the portfolio you need at retirement or ten years into retirement.
Use your annual review to model different scenarios rather than relying on a single assumption.
8. Review your entire investment position, not one fund at a time
Looking at investments separately can hide problems that become obvious when the portfolio is viewed as a whole.
For example:
- two funds may contain similar underlying investments;
- your combined offshore allocation may be substantially different from what you intended;
- total investment costs may be higher than expected;
- different products may be working towards conflicting objectives; or
- your overall risk level may no longer suit your circumstances.
A portfolio-level assessment can therefore be more useful than asking whether one particular fund has performed well.
Not sure whether your investments are on track?
Investonline’s Investment Health Report is designed to help investors review important aspects of their existing investment position, including areas such as costs, performance and advice.
A second opinion can be particularly useful if you have accumulated several investments over time or are unsure how your current portfolio compares with your objectives.
9. Consider what has changed in your life
Markets are constantly changing.
That does not mean your portfolio needs to change constantly.
Changes in your life, however, can be a good reason to reconsider your financial plan.
Examples include:
- changing jobs;
- a significant salary increase or reduction;
- marriage or divorce;
- having children;
- receiving an inheritance;
- selling a business;
- moving overseas;
- approaching retirement; or
- beginning to draw an income from your investments.
These events can affect your objectives, tax position, investment horizon, liquidity and tolerance for risk.
Your portfolio should evolve when your financial needs evolve.
Should you review your portfolio when markets fall?
Yes — but reviewing does not automatically mean changing.
When markets fall sharply, it can be useful to confirm that:
- Your investment strategy remains appropriate and your financial plan remains on track.
What you want to avoid is making major long-term investment decisions purely because of short-term fear.
Market volatility is part of long-term investing.
If your goals, timeframe and circumstances remain unchanged, the correct decision may sometimes be to make no change at all.
A simple investment portfolio review checklist
A useful annual portfolio review should answer these questions:
- Goals: What am I investing for, and have my goals changed?
- Progress: Am I on track to achieve those goals?
- Performance: How has my portfolio performed over an appropriate timeframe and relevant benchmark?
- Asset allocation: Is the portfolio still invested at an appropriate level of risk?
- Diversification: Am I overly exposed to any particular market, asset class or investment?
- Fees: What am I paying in total, and am I receiving value for those costs?
- Advice: Is my financial advice helping improve my overall financial outcome?
- Retirement: Are my savings and projected income still sufficient?
- Life changes: Has anything changed that requires my financial plan to change?
- Action: Does anything genuinely need adjusting, or should I remain invested?
How often is too often to check your investments?
There is nothing wrong with having access to your portfolio.
The problem begins when checking becomes reacting.
Daily market movements contain a large amount of short-term noise. For someone investing over ten, twenty or thirty years, repeatedly making decisions based on those movements can distract from the factors that matter more.
A better approach is to separate:
- monitoring — knowing where you stand
- decision-making — changing your long-term investment strategy.
Good investing often involves making fewer, better-informed decisions rather than constantly doing something.
The bottom line
For many long-term investors, an annual investment review provides a sensible opportunity to assess the big picture, while shorter periodic check-ins may be useful depending on your circumstances.
But frequency is less important than the quality of the review.
Do not simply ask:
“Did my investments go up?”
Ask:
“Am I still on track to achieve the financial outcome I need?”
That question shifts your attention away from short-term market noise and towards the things you can actually control: your goals, savings, portfolio structure, diversification, costs, advice and long-term financial plan.
Take the next step
Want a second opinion on your existing investments?
Request an Investonline Investment Health Report to review your portfolio’s costs, performance and advice and identify areas that may deserve closer attention.
Planning for retirement?
Use the Investonline Retirement Calculator to see how your current savings, retirement age, income needs and assumptions could influence your future retirement income.
