Spring Cleaning Your Investment Portfolio: Tips for a Fresh Financial Start

Our daylight hours are getting longer, kids are excited for spring break, and you might be gearing up for some ambitious spring cleaning. Your closets might need it, sure. But what about your investment portfolio? This season of renewal is a nice reminder to check in with a financial advisor to assess your portfolio and ensure there’s no need to clear out any clutter.

Here are a few things you should consider talking about with an advisor.

Review Your Goals: This is a great place to start -- revisiting your financial goals. Have your objectives changed since you last reviewed your portfolio? Whether you're saving for retirement, a home purchase, or your children's education, make sure your investments align with your current aspirations.

Assess Performance: It’s important to have an advisor you trust and whom you know is working in your best interest to help you gain a clear understanding of your portfolio’s performance. Identify any underperforming assets and discuss with your advisor. While you’re at it, make sure you celebrate any successes you identify!

Consider Rebalancing Your Portfolio: Over time, market fluctuations can cause your asset allocation to drift from its original target. Rebalancing involves adjusting the proportions of different asset classes in your portfolio to realign with your desired risk level and investment objectives. Again, these conversations between you and your advisor should help you get a clear picture of your progress.

Revisit Conversations Around Diversification: Diversification is part of managing risk in your investment portfolio. Accepted thinking is that, by diversifying, you may help reduce the impact of any single investment’s poor performance on your overall portfolio.1 So take this opportunity to review your assets with your advisor to ensure you’re comfortable with how they are spread across various asset classes, sectors, and geographic regions.

Consider Tax Implications: No one likes the “t” word, but spring is tax season, after all. So, it’s a good time to review the tax implications of your investment decisions with your tax professional. You can work with them to assess whether any capital gains or losses should be harvested to optimize your tax position. Additionally, explore tax-efficient investment strategies, such as utilizing tax-advantaged accounts like IRAs and 401(k)s.

Stay Informed: This is good advice year round. Knowledge is power, so working with your advisor and on your own to stay informed on market trends, economic developments, and regulatory changes that could affect your investments may help you make more measured decisions when it comes to your investments.

As always, consider consulting with a financial advisor to gain insights tailored to your specific financial situation and objectives.

1  FINRA, "Asset Allocation and Diversification," February 28, 2024