Your portfolio might be in need of a tune up. Here's how to check.

In a constantly shifting market, staying on top of your portfolio is key to helping ensure you get the best results. However, many investors only think about what investment opportunity to buy next, without paying attention to whether their overall portfolio is still aligned with their goals.

The second half of the year is the perfect time to take a fresh look at your investments and make any necessary adjustments. To help you stay on track, here are three simple steps to think about when deciding whether you need to rebalance your portfolio for optimal performance:

1. Review Your Investing Goals and Plans

Checking in on your investment goals is important for aligning your portfolio with your financial goals.

Here’s how to make sure your investments are still working for you:

If your goals have changed:

Take a fresh look at your new goals. You might need to adjust your strategy—whether that's shifting to a more conservative approach for stability or adopting a more aggressive one for higher growth.

For example, if you initially focused on preserving and protecting your capital but you now want to focus on more growth, you might shift a greater portion of your portfolio into equities. This could offer the potential for higher returns compared to more conservative investments like cash or fixed income.

If your goals haven’t changed:

Stick with your long-term plan, but be open to making small adjustments as needed based on market conditions and your personal outlook.

Regularly evaluating your goals helps maintain a strategy that fits your risk tolerance and financial objectives, ensuring your portfolio adapts to your changing needs.

2. Check If Your Current Allocation Is Still on Target

Over time, some investments in your portfolio may outperform while others may lag, leading to a shift away from your preferred asset mix. Here’s what you can do:

Assess the Weight of Each Holding:

Look at how your investments are distributed between stocks, bonds, and other assets. If one area has grown significantly, it might make your portfolio too heavy in that sector or type of asset. Rebalance (buy or sell) your investments to make sure the overall portfolio aligns with your original target mix.

Identify Underperforming Assets:

Evaluate assets that aren’t meeting your expectations. Decide if they still fit within your overall strategy or if it’s time to reallocate those funds to better-performing investments.

Maintaining a well-diversified portfolio helps manage risk and achieve more stable returns. By regularly checking and adjusting your allocation, you ensure that your investments stay in line with your risk tolerance and financial goals.

3. Make Appropriate Adjustments Based on Market Guidance

If you’re not a trader or a highly active investor, you may not be watching the market too closely. While this is wise to do for long-term, buy-and-hold investors, we still encourage all investors to have a general idea of where the market is at, so you can make changes to your portfolio if needed.

To do this easily, don’t miss COL’s Market Outlook and other similar webinars where we share our guidance. You can also keep up-to-date by checking your email and your COL account regularly to view any research or guidance materials from COL.

Conclusion

Just by doing those three things, you’re already on your way to making sure your portfolio is always in line with your investing plan. For long-term investing success, make sure rebalancing regularly is part of your investing strategy!