Portfolio Analysis 

Portfolio analysis is the process of studying your investment portfolio to determine whether it is suited to your needs, resources, and expectations, and whether it has the potential to meet your investment goals in the timeframe you have laid out. This process will look both at the history of your current investments, as well as projections for their performance going forward. It will also evaluate the asset mix that is held (equities, fixed income products, cash, other holdings) to determine the risk level of your current investment portfolio.

Portfolio analysis is important to ensure that you are well set up to meet your investment goals. Each investor has unique needs and goals and, while generic investment advice has educational value, your investment portfolio needs personalized advice to help you reach your goals. Nothing can torpedo your investment strategy quicker than a poorly structured investment portfolio.

Investment risk tolerance is the amount of variability, or instability, in investment returns an investor is willing to withstand in their investment portfolio. One important part of a portfolio analysis is determining your investment risk tolerance level. It’s important to think about this before your portfolio analysis as it will impact the advice you get regarding your investment allocation.

An aggressive risk tolerance level means that you are comfortable with an all or nothing investment strategy. That is, you are comfortable making risky investments that could come with big returns or big losses. Generally speaking, investors with an aggressive risk tolerance have a longer investment timeline that will allow for bouncing back from large losses over time.

When analyzing your investment portfolio, we take a look at the following areas:

• Investment Fees: What are your annual management fees? Are there any hidden fees? How much are you paying per trade? Fees are the number one area where investors can lose money, without even making a trade. We’ll analyze how much the fees you are paying detract from your overall portfolio’s worth to determine whether you are paying too much and if there are lower cost options available to you. 

• Diversification: Are you overexposed in one investment area or region of the world? What is the investment objective defined by your asset mix? Do you hold multiple holdings that do the same job? A great portfolio is a diversified portfolio. Diversification ensures that, no matter what happens in the world, your portfolio is balanced in a way that can absorb fluctuations. 

• Account Structuring: Are your accounts structured properly? Are you positioned to avoid and/or defer taxes? How and when should your accounts be planned to change in the future? As you get older, your investment goals and risk tolerance are likely to change, and your investment portfolio should be set up to change with them. Portfolio analysis will allow you to plan for those changes in advance.

Whether you are new to investing or have an established, but neglected, portfolio, portfolio analysis is for you. The personalized advice you will receive is priceless for the peace of mind, and solid investment strategies, you will gain. Contact us today to set up your portfolio analysis appointment.