6 Ways to Give Your Portfolio a Spring Tune Up

After a cold, hard Canadian winter, there’s nothing like those early signs of spring – the days start to stretch longer and all that snow begins to recede. True, it might still be a while before you can ditch your coat and your snow tires, but there are other ways to mark the turn of the season.

Most people’s spring cleaning to-do list includes the usual items like decluttering the house or cleaning up your garden – but it’s also a great time to check in on your investment portfolio.

To help get you started, here’s a checklist of six spring cleaning ideas you could do to help keep your portfolio on the right track:

Sort it – Gather all your investment account statements into one file. If your money is spread over different accounts it may be hard to keep track of how you’re doing overall. You might consider whether it makes sense to consolidate some of your accounts to help reduce the clutter. It might even help cut costs.

Check your performance – Ask your advisor or investment manager for a detailed report on how your portfolio has performed, not just for the past year but over the last three and five years too. You can use our portfolio benchmark calculator as a first step.

Track it – Ask for a detailed explanation of any gains or losses in your portfolio over the last year. You’ll need this information for your tax filing.

Diversify – Too much exposure to one stock or asset class can affect your investment returns. When you invest, you’re exposed to different types of risk and different risks can affect your investment returns. Use this chart to learn what happens to a stock portfolio’s total risk as you increase the number of stocks.

Check in with your advisor — When you started working with your advisor he or she would have asked about your goals, risk tolerance, your time horizon and a host of other important details about you. Updating your advisor on your current financial situation is one of the best ways to see how your investments are doing relative to your goals and needs. If they’re not in line, then ask your advisor why – and if necessary make changes. Don’t forget to talk about anything that’s changed in your life – a new baby, illness or a pending retirement could also change how your portfolio is invested. You can access more information in our life events hub.

Cost it out – Ask your advisor to list all the fees you paid last year in dollars, including management expense ratio, deferred sales charges and trading commissions. No one works for free, but fees can have a significant impact on how your portfolio performs – our mutual fund fee calculator can help you break it down. With the latest cost disclosure and performance reporting requirements, your investment firm should be telling you how your investments are performing and also the charges and other compensation paid to your firm. If you think the fees are too high then consider making changes.

Resources:

Visit the OSC’s InvestmentReporting.ca website that helps investors understand their investment performance and costs as part of the latest cost disclosure and performance reporting requirements.

Visit our tools and calculators hub to access calculators including RRSP, TFSA, Portfolio benchmark and many more.

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