Sunday, October 17, 2021

Ask the CFP®



Darcie Guerin

“There are two cardinal sins from which all others spring: Impatience and Laziness.”  – Franz Kafka, German existentialist author, 1883-1924.

Question: How frequently should I monitor my portfolio? – David S., Marco Island

Answer: Monthly portfolio reviews are a good place to start. Even if you have chosen an appropriate asset allocation, market forces may quickly alter your allotments and require attention. If stock prices go up, you may eventually find yourself with a greater percentage of stocks in your portfolio than you intended. If stock prices go down, you may be concerned about reaching your goals. Remember that there is a difference between checking on your investments and making changes. How often you check your portfolio is a personal preference dependent on a variety of circumstances. At a minimum, review the reasons for your current asset allocation and make sure the rationale is still suitable.

Some investors set a regular day each week, month, or quarter to review their holdings. Many people select the end of each year or tax-time for an in-depth analysis while keeping an eye on short-term trends more often. Investing is cyclical and all investments generally go up and down in value from time to time. Double check with yourself and your financial professional if you’re thinking about deviating from your portfolio strategy.

A rule of thumb is to rebalance your portfolio whenever one type of investment becomes more than a certain percentage of the overall mix. For instance, if one holding has increased in value and now represents more than 5 or 10 percent of your portfolio, you may wish to make adjustments.

The nature of individual investments may change over time. This kind of “style drift” can affect the risk you’re taking without your knowledge. Following individual investments and the overall asset allocation is important. Fine-tuning your portfolio periodically should reflect your investing personality.

There is the temptation to adjust your mix of investments to focus on what you think will do well in the future, or cut back on what isn’t working. Unless you have a flawless crystal ball, this is a trickier strategy than the constant weighting of asset allocation. Even if you know when to cut back on or get out of one type of investment, are you sure you’ll know when to go back in? A compromise would be to invest a portion of your assets in this fashion.

New investors or those just getting back into the swing of things typically check in on a more regular basis until they achieve a certain comfort level. Too much attention may be harmful if it causes you to act impulsively or causes unnecessary stress. Wall Street old timers say that a portfolio is like a bar of soap that gets smaller each time it is touched.

Another factor to consider is if you’re working with a like-minded financial advisor or managing your investments on your own. Two-sets of eyes may be better than one. Ultimately, the right answer to how often you should check your investments is determined by your personal comfort level.

Our grandson Luke’s first puppy never had a chance to sleep; he kept poking Benji to make sure the dog was okay. Sometimes it is best to let sleeping dogs lie. The point here is that there is a difference between checking in on your investments versus overreacting to short-term market movements and making reactionary or emotional changes. This goes back to the old adage; “know what you own and why you own it.”

Researching and tracking investments takes time and experience. In addition, too-frequent rebalancing can have adverse consequences. You will also want to consider transaction costs. No matter what your strategy and the frequency with which you monitor your portfolio, work with a trusted financial professional/coach or get a second opinion to help keep your portfolio on track. Stay focused and invest accordingly.

Asset allocation and diversification do not guarantee a profit nor protect against a loss. This information is general in nature; it is not a complete statement of all information necessary for making an investment decision. Investing involves risk and the possible loss of principal invested. Past performance is not indicative of future results. There is no guarantee any particular investment strategy will be successful. Opinions expressed herein are those of the author and subject to change at any time.

*“Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S.”


Darcie Guerin, CFP®, is Associate Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at 239-389-1041, email


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