Over the years you may have acquired a range of investments, whether they are investments within a pension, ISA’s, unit trusts, Investment Trusts, Investment Bonds or direct shares.
It’s one decision to invest in the first place, however when it comes to reviewing whether the investment is doing what it should be, this is often overlooked. Investors often only look at the value periodically to see whether a profit has been made. If the investment is showing a profit, most investors are happy to leave them as they are. But is this enough?
Let me explain. For example, if your investment has increased in value by say 6% since you last received a valuation, the logical conclusion most of us would take, is that everything is fine and leave the investment to continue. But what if I said to you, the underlying market of the investment had risen by 12%. Now you might be thinking that your investment was not so good after all. I know the numbers are quite dramatic, but nevertheless it illustrates the point. Similarly if your building society or cash ISA interest rate was 1.5%, but you could get 3.05%, you wouldn’t want to leave it earning 1.50%.
So what’s the answer? Regular detailed reviews of your investment portfolio. You might not think that it’s particularly worth it, as investment performance goes up and down over time. Investors would be wise to think differently. For example, if you managed to improve the performance of your investments by just 2% a year, the value would have increased by a further 48.59%. I’ll happily take that thank you.
And there is another point that investors would be wise to consider. Very few investments consistently produce returns year in year out and certainly certain sectors prove profitable for a number of years, before declining. A perfect example of this is the property sector. Up to 2007 this sector achieved some very good returns, but just look at what has happened for the last five years.
So, make sure your regularly review your investment portfolio to make sure it’s on track and fit for purpose. You may be missing out on profits.
