It is important to sit down from time to time and review your portfolio to make sure that your investment strategy and allocation still has you on track toward financial stability in the future. The following describes why it is important to review your portfolio, and when you should consider changes.
Why Make Changes?
Most people do not spend their entire working life in the same job or with the same company without at least reassessing their position at some point in time. To think of it another way, you would not keep the same one-bedroom apartment you had as newlyweds when you start having children.
The stock market can give any faithful follower ulcers and high stress. On any given day the stock market can soar to new heights, crash to new lows, or experience any degree of ups and downs in between. For novice and moderate investors, dealing with the constant ebb and flow of the market can be stressful.
First-time investors are bound to make mistakes when it comes to judging and making decisions regarding the stock market. Without experience, it is all too easy to be swept up in the excitement of investing and make decisions based upon emotion rather than sound reasoning.
The average individual undoubtedly understands that there is a difference between saving and investing, even if those terms are sometimes used interchangeably. The key to taking advantage of saving and investing is understanding the difference between them. In short, saving and investing differ in terms of risk and liquidity.
Just as a distance runner might find it difficult to focus on an entire marathon, investors struggle to stay on a path toward a financially healthy retirement. Preparing for your retirement finances should be viewed as a marathon, rather than a sprint. Unless you win the lottery tomorrow, you are not going to be prepared to retire at the end of the year or even the end of the decade.
With online trading and mobile apps that allow investors to buy, sell, and trade at the drop of a hat, it is difficult to imagine a time when investing looked different than it does today. Believe it or not, the history of investing dates back well beyond the advent of the computer and the Dow Jones Industrial Index. Would you believe that investing dates back as far as the 1600s?
Unless you are over 100 years old and were around to invest in small brands like General Electric (GE) or tech stocks before they became a massive hit, your investment portfolio probably does not consist of one major player that earns all of your income.
It is not enough these days to put your money into a single retirement account and cross your fingers. Additionally, younger generations should avoid placing too much faith in Social Security. Economic markets today undergo drastic ups and downs over the course of months and years, resulting in setbacks for your retirement funds.
Paul B. Miller, as a Certified Financial Planner (CFP®) and an Investment Advisor Representative (IAR) started Indian River Financial Group, Inc to act as a financial planner for clients from Boca Raton, Florida, as well as the surrounding communities, and to offer you services such as asset management, wealth management, investment planning and risk management.
© 2025 Paul B. Miller, CFP. All rights reserved.
