Only sustained vigilance on where your money is and how it’s doing will make investments worth your while
If foresight is the backbone of wealth planning, actively monitoring investments is its lifeblood. Investing is a dynamic arena where small market ripples can set off major changes across a portfolio. Sometimes those ripples are personal—and changes in the investor’s circumstances can require a realignment of their present and/or future interests.
Either way, a finger on your portfolio’s pulse is essential. Closely monitoring investments can generate further wealth or avert losses, and this is also about more than knowing the numbers. Investing well requires a certain perspective to avoid being too confident or worried about cyclical changes.
The proper monitoring mindset
Markets can be volatile and unpredictable, and regular monitoring fosters an invaluable quality in an investor: equanimity. Keeping watch on investments helps individuals see the ebb and flow of markets over time. Exposure to this fluctuation creates a more centered and resilient point of view in investors who appreciate that a loss need not be the end of the world—nor a quick gain a signal to get overconfident.
Monitoring multiple investments (particularly if they span asset classes) makes individuals an active part of their wealth strategy, instilling a greater awareness of how different classes interconnect and why notions of a weak or strong return vary between markets.
Inevitably, investors will look at the portfolio returns of others and conclude they are somehow better or worse off. Investment monitoring shifts that mindset to one centered around benchmarking. For example, gains and losses in small-cap stocks aren’t comparable to those of large-caps. Funds that invest in stocks and bonds cannot rightly be compared to those dealing purely in stocks or other vehicles.
Cross-category comparisons can be beneficial in some instances while monitoring your current investments, however. Perhaps there’s another asset class that interests you and you wish to follow its fortunes for a while, or you may wish to compare the portfolios of others who have similar investment goals to your own. In this instance, a key is to compare both the overall cyclical losses and gains as well as the volatility of these swings.
How the monitoring mindset pays off
Whether long or short term, data monitoring provides the means for investors to regularly assess their portfolio and interests and see how they’re aligned with their time-based strategies.
Long-term investors can benefit from peace of mind through receipt of monthly or quarterly investment reports. If you’re a short-term investor, checking in far more regularly on your portfolio is a sound idea. Indeed, if your investments are on the riskier side, it’s a necessity. Daily or weekly information may be necessary to keep things headed in the desired direction.
Some rebalancing may be necessary in order to realign with new goals or to stabilize the portfolio after a loss. Rebalancing is a strong way of managing your portfolio’s risk and maintaining smart relative percentages of your investments by selling or buying asset classes to restore your strategy’s equilibrium.
Seeing the fluidity of markets firsthand assists every type of investor in making more informed decisions instead of upending their strategy over short-term concerns. This also prevents unnecessary expenditures in transaction fees and taxes. It’s arguably always best to monitor over the long term than to go for short-term gains since troughs can often be temporary and not a good gauge of performance over time.
Monitoring also helps shield against data discrepancies and clarifies costs. Regular reports from your wealth advisor will provide, among other things, reviews of all activity during the quarter, projections for the near or farther future, and full and clear details on all fees and expenses. Projections reveal the potential of an investment—which may be positive or negative regardless of its current performance—in a wider market context. And getting this kind of valuable feedback requires partnering with an experienced advisor.
Lindberg & Ripple is here to keep you and your investments connected
Staying informed on how a portfolio is progressing helps forge a smarter, wiser, and wealthier investor. How closely and regularly assets are monitored can vary, but we don’t recommend going more than a year without a comprehensive review—and a potential rebalancing—of your interests. This review may be fairly complex if those interests are numerous.
In addition to providing monthly statements and quarterly reports, Lindberg & Ripple offers an online portal that presents on-demand information in a clear, easily-accessible format. In addition, we provide aggregate reporting so you have complete portfolio information, even if you have money spread over multiple custodians.
The Lindberg & Ripple team brings decades of experience and client-centric care to our investment advice and wealth management strategies. No matter your timeframe or investment style, our insight is provided purely for your advantage and to suit your specific goals. Reach us at the link below to learn more about or commitment to your financial future.
Lindberg & Ripple offers customized wealth management, investment, and insurance solutions to wealthy families and successful businesses. We help our clients craft a comprehensive wealth planning model to achieve their financial goals with minimum fuss and maximum savings. To learn more, connect with us.