What’s in Your Portfolio?


This blog post was originally published on April 6, 2020. It was updated on July 12, 2021.

With rollercoaster lows and highs, the coronavirus pandemic certainly did a number on the U.S. stock market. It also created concern – and heartburn – for many investors as they anxiously watched news headlines, market trends and the impact on their personal portfolios. With the market now seeing a strong resurgence, that concern may be waning; however, there are still plenty of reasons your portfolio needs your attention. 

In good times and bad, it’s important to review your portfolio regularly.   

A solid portfolio review process takes all of your investment statements and combines them into a picture of your true portfolio.  After all, most of us have more than one investment account.  Maybe you have an IRA, a 401(k) from your current or previous employer, and maybe a brokerage account with some stocks you chose or inherited.  You get regular statements from each, but you probably don’t know whether their holdings overlap, or if the strategies make sense together.  It’s likely you don’t have an accurate picture of your full portfolio. 

There may be issues that you don’t see. 

Here are just a few questions your portfolio review might address. 

1. Do your investments match your risk tolerance? 

Your appetite for risk is very personal.  Some people like the thrill of jumping out of airplanes; others prefer quiet walks on the beach.  Your risk tolerance should be a major driver of your investment decisions; so should your stage in lifeA good investment adviser will take your risk tolerance into account and adjust as your circumstances change.  At Kaufman Rossin Wealth, we use a risk assessment that’s a series of questions.  If you’re investing with a spouse or partner, we make sure to understand the tolerance of each person separately.  When we review the portfolios of prospective clients, our first step is to assess your risk, and then see how well your portfolio matches.

2. Are the equities in your portfolio too concentrated? 

Even if the overall percentage of equities is in line with your risk tolerance, are there concentrations within the equity portion of your portfolio? A prudent adviser will identify if there are any specific risks within the equity portion of your portfolio from concentrations based upon size, style, or company specific risk.  Even industry concentrations may be an issue, if all your holdings are in one category that could be subject to significant economic downturn.

3. Do your bond holdings carry more risk than you expected? 

Do you really know the underlying credit ratings of the bonds in your portfolio?  Many investors don’t.  If your fixed income investments are in bond funds, you may not really know what you own.  “High yield” bonds, for example, may offer higher long-term returns than investment-grade bonds, but they’re also known as “junk bonds.” They face higher default rates and more volatility.

4. What is the true cost of your portfolio?  

As they say, it’s not what you earn, it’s what you keep. And the costs involved in investing aren’t always clear up front. Does your adviser operate in a fiduciary capacity with complete transparency in pricing or are the costs of your portfolio unclear? Do you work with a registered investment adviser who is required to act in your best interests, or with someone who tends to recommend proprietary mutual fund (products manufactured by their employer)? A good portfolio analysis will address all of this. 

If you don’t know what’s in your portfolio, now’s the time to find out.  Reach out to have our professionals perform a portfolio review.  We’ll assess your risk tolerance, take a look at your statements, and assemble a full picture of your holdings, and share what we’ve learned.   

There’s no time like the present.   

Jay Pelham, CFP®, is President at Kaufman Rossin Wealth, LLC, a Registered Investment Adviser.

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