It is always a good practice for an investor to routinely monitor their investments to see how they are performing. Whether they are a very active investor or a passive investor, investors should know the health of their investments. While most investors hope to grow their assets over time, some assets are not worth holding onto after a certain amount of time. Auditing an investment portfolio will allow an investor to determine if their investments will allow them to meet their long-term goals, which assets they want to retain, which assets they may want to invest in, and if there are any assets in their portfolio that are underperforming.


Know Your Worth

The first step that an investor should take before making any changes to their portfolio is determine how much money they have available to them in cash and assets. An investor should make a list of their complete investment portfolio to get a solid figure of the amount that they have invested. After an investor has an understanding of their assets, they will want to get the net amount of their liabilities.


In The Bag

An investor needs to understand what exactly they are invested in and how those investments are projected to perform long-term. Depending on the investor’s goals, risk tolerance, and specific time horizon, they may want to consider investing in a variety of new assets or purchasing more of an asset that is already in the portfolio. Though it is not a good benchmark for switching to new investments, the investor should also compare their investment portfolio to solid benchmarks such as the Dow Jones Index for investors in stocks, or homes in the immediate area for real estate investors.



An investor may want to adjust their portfolio after assessing what is in it and how it’s performing based on their goals. Adjustments can include things such as placing more cash into assets, converting assets into other assets, selling liabilities to purchase assets, or selling assets to increase cash within the portfolio. The decisions that an investor makes for their portfolio after the assessment will depend solely on their goals. Investors who need a little extra assistance with financial planning should contact a financial advisor that can suit their needs.