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Staying on Track and in Balance
After you set up your portfolio and you’ve allocated your assets, it might be nice to think you could turn off the light…lock the door…and come back in 20 years. Unfortunately, it doesn’t work that way.
One of the keys to financial success is a watchful eye…but not the proverbial knee-jerk. Experts generally suggest that once you establish realistic financial goals and map out a strategy to reach those goals, you then establish a plan to review and monitor your various accounts.
Over time, your investment accounts will fluctuate, for better or worse. At the end of a year, for example, you may find that your very nicely structured pie chart that included 40% stocks, 40% bonds and 20% money markets has now metamorphosed into 60% stocks, 30% bonds and 10% cash.
The good news in this example is that your stocks appear to be doing well, but the temptation to leave this alone should be resisted. Unless your situation has changed, you should consider working with your financial professional to re-set or rebalance your portfolio back to its original 40/40/20 mix.
As tempting as it may seem, jumping on the hot investment du jour isn’t always the smartest way to go. The terms “on track” and “in balance” have a lot to do with keeping that metaphorical investment train on its rails. Your financial professional knows exactly what to do to help you get your train to the next station.
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