Talbot Boggs Moneywise col: Give your portfolio a mid-year review

One of the principles preached in the investment industry is to buy and hold – buy good, solid investments and hold on to them. Don’t try to time and beat the market. Over time quality will pay off.

This may be sage advice but it doesn’t mean that investors should put their portfolios on automatic pilot, forget about them and just assume that everything if rolling on well – particularly in volatile and unpredictable times like these.

As the middle of the year approaches, now might be a perfect time to review your portfolio to see if it is performing as you had hoped and moving you forward to your goals.

“This is an excellent time to look at your portfolio in terms of what has been happening so far this year and what may be coming up in the future,” says Dan Beyaert, an investment adviser with Investment Planning Counsel in Calgary.

There currently are a lot of global political and economic issues at play that could impact the Canadian economy and may cause investors to take a look at their portfolios to see if they should make changes.

These could include Britain’s departure from the European Union, renegotiation of the North American Free Trade Agreement, approval of the Keystone pipeline, U.S President Donald Trump’s imposition of countervailing duties on Canadian softwood lumber, and the spectre of rising interest rates.

“Unfortunately people have a tendency to react after things happen, but by then it’s often too late,” says Beyaert. “Try and be prepared before things happen by asking yourself questions like what would happen if interest rates rise? How will it affect me and my investments? It’s all about trying to be proactive.”

There are other times when a review of your portfolio probably makes sense — major life events such as the loss of a job, a serious illness or disability, and as you near or enter into retirement.

Financial experts like to refer to stress testing your financial plan — running scenarios to see what would happen if you suddenly have to retire sooner than you thought, if you stay retired longer than you thought, of if you and/or your spouse or both of you become ill, disabled or die.

“My experience is that a lot of people don’t end up choosing when they retire – it often happens to them due to the economy or as a result of health,” says Beyaert. “You suddenly might find the family has gone from two income earners to one. With half the income you might want to shift where your investments are.”

Beyaert recommends people consider making disability and/or long-term care insurance a part of their financial plan as a way to mitigate risk and plan for the unexpected. Most people take a rather casual attitude to this, thinking it never will happen to them, but it can be a great exercise and a real eye opener.

“Disability is one of the biggest causes of mortgage foreclosure — people become disabled or sick, can’t work and can’t pay the mortgage,” Beyaert says. “Insurance can pay an income to age 65 if you can’t work but you need to check the policy to see if it is for your occupation only or for any occupation. The definition of disability can vary.”

Beyaert notes that financial markets have been in a bull cycle for the last eight years. Is a correction or downturn coming? Investors might want to rebalance their portfolios by selling some of their fixed income securities and then, if a correction does come, buying equities at lower prices.

“Any time is a good time to look at what is happening, see if there are any investments dragging your portfolio down and maybe shift some of your money to other areas and sectors,” Beyaert says.

It’s important to remember – a portfolio needs to be reviewed and managed from time to time. Take care of your money and it will take care of you.

Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.

Copyright 2017 Talbot Boggs


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month