Many of us only look at our financial plan when we receive a windfall (this is not often…) or when things go terribly wrong. It could be the loss of a job, the loss of a loved one or another crisis (like a global lockdown…).
These aren’t necessarily the best times to make investment decisions or changes to our financial plans as emotions are often running extremely high during times of transitions and our stress levels will be elevated.
That’s why taking the time to do regular (quarterly or biannual) reviews gives you a better baseline from which to assess your portfolio and keeps you in the practice of being aware of what’s going on with your money. This is often easier said than done, and if you currently find yourself needing to make some changes, and are highly emotional or stressed, make sure you include an impartial third-party to assist you with this.
Your review should consider each of your financial priorities and your strategy for reaching them. If the conditions have changed, adjustments need to be made to make these priorities attainable in your desired time frame. Again, don’t feel pressured into doing this alone – include the others in your family who contribute to making and spending your combined income, and bring in your financial adviser.
As you do this, you will quickly notice that your priorities will change, you may need to rebalance some of your investments or portfolio products. This is okay – being flexible inside of your plan is as important as checking in with it regularly.
Thinking about a will, health care proxy, and power of attorney can be uncomfortable, but the alternative is letting someone else make these decisions for you. If you don’t have these key documents, take the time to set them up. If you already have them then a review might be in order. Life events such as moving, having children or grandchildren, or losing a loved one can have a big impact on your overall plan.
Careful, regular planning is essential in all economic climates. Are you preserving your assets? Are you protecting your income? Are you saving tax efficiently? A review can help prioritize financial decisions that you need to make to support your own and your family’s goals across generations.