Financial planning is a complex and dynamic process that requires individuals to be proactive in their investment strategies. We find ourselves moving from the empirical to the emotional, from processes to perceptions and from products to people.
Changing financial goals and shifting market conditions are just some of the many factors that necessitate adjusting a well-informed investment approach. However, before making any changes to your investment portfolio, think before you switch.
The first question to ask is, “Am I working with a financial adviser I can trust?” Working with a trustworthy financial adviser is critical to building a solid foundation for your investment portfolio. Working with someone who understands your financial goals and has the expertise to guide you through the investment process is essential. Blind spots are common, and even financial advisers need financial advisers for our personal portfolios.
The next question to consider is, “How have my circumstances changed?” It’s helpful to recognise life changes that may impact your financial situation, such as marriage, children, or a change in employment. Working with a trusted financial adviser can help you track and identify gradual changes that may impact your investment and future plans.
Another critical question we like to ask is, “Has there been a change in my risk tolerance?” Various factors can influence your risk tolerance, such as your investment horizon, financial timeline, or a change in your risk preferences.
For example, if you’ve decided to move your retirement date, this might change your investment strategy. As a result, it is essential to assess your risk tolerance regularly to ensure that it aligns with your investment goals.
A common question that most investors ask themselves is, “Are any of my funds underperforming?” While monitoring your fund’s performance is crucial, it is important to put it in the context of the entire portfolio and the outcomes you had hoped for.
A bad week, month, or year may not be a valid cause for concern for long-term investment strategies. However, consistent poor performance over several years may yield a legitimate concern and reason to reflect on your fund selection.
While financial planning can be challenging, asking the right questions can empower you to navigate change and make informed decisions.
Our team at Victus Group can help you through this process by providing expert advice and guidance. By asking yourself these critical questions, we can prepare for your following financial planning conversation and build a sound investment strategy that reflects what is important to you.
Despite our best efforts in financial planning, things sometimes go differently than we expect. As a result, circumstances may arise where we feel the need to switch investment funds. We must evaluate these reasons carefully, as some may be valid and others may not be. The tips provided in this blog can help you prepare for your next financial planning conversation and make informed decisions about your investment portfolio.