Ok, forgive the super dramatic title. However, I am a firm believer that there are certain things every investor must do from time to time to ensure that their portfolio is acting as it should. As a do-it-yourself investor, these things are super important because you are the only one working on your portfolio. If you use an advisor, these actions are just as important to do however you need to push that advisor to do them! If you have already done these things then you should be in good shape. If not, then schedule some time over the next week to do them.
1. Check the Fees you Pay
As time goes on, fees suck more and more money out of your portfolio. Nowadays, there is often no real reason to pay more for things like commissions, RRSP (or 401K) fees, and MERs. Take a look at the fees you are paying and ensure they are the lowest you can possibly get. If not, call your broker and find out why.
2. Verify your Asset Allocation
Your asset allocation will play a huge part in the future success or failure of your portfolio. If your asset allocation is not balanced or is wrong for your risk tolerance then you need to fix it now. Review your risk tolerance and then get and read The Four Pillars of Investing and adjust as necessary.
3. Check Your Individual Stock Holding's Performance
If you are an individual stock holder - even of dividend growth stocks - then it is very important not to "set it and forget it". At least once per quarter you need to check each stocks performance. How were quarterly sales? Did earning actually go up or was there some funky accounting going on? Did it beat all its industry peers? If not, then you need to find out why and be comfortable that the reasons are valid enough for you to continue holding.
4. See if You Can Save More
Life goes on, raises at work happen, expenses go up and down - life just happens. What you set aside for investment savings one year ago may not be all you can now contribute to your dividend growth fund or overall portfolio. Have a look at what you put aside every month and see if there is now room to contribute a little bit more. It does not need to be much - even an extra $10 can have dramatic compounding effects.
I know there are many other things that should be done today - if you have suggestions then use the comments section to let us know about them.
This article was written by The Dividend Guy. You may email questions or comments to me at info@thedividendguyblog.com.
2 days ago
