Broker Check
How to Check the Health of Your Investment Accounts

How to Check the Health of Your Investment Accounts

December 27, 2022

Everybody likes a day when the market is green. Especially for your personal accounts, it is important to stay on top of your investments to make sure they are performing well. After all, these accounts are crucial for your long-term financial security. Growing your assets consistently forms a foundation for the rest of your life. Here are a few things you can do to check the health of your investment accounts and ensure they are still on track.

  1. Review your goals.

The most fundamental step is to evaluate your investment goals with a few questions. Why did you start investing in the first place? Are you trying to save for retirement? A rainy day fund? Or are you looking to grow your wealth? Once you know your goals, you can better assess how your investment accounts are performing. If your goal is to retire by 65 and you’re 50 years old, for example, you will want to see significant growth in your accounts over time.

  1. Know your risk tolerance. 

Your risk tolerance is another important factor to consider when assessing the performance of your investment accounts. Are you the type of investor who is comfortable with a little risk in exchange for higher potential rewards? Or do you prefer a more conservative approach with lower returns but less chance of losing money? Knowing your risk tolerance will help you determine if your investment accounts are meeting your expectations in terms of both growth and stability.

  1. Track your progress over time. 

Investment accounts tend to fluctuate year over year, so it is important not to get too caught up in short-term changes. Instead, focus on tracking your progress over a longer period of time, such as five years or more. This will give you a better idea of how well your investments are performing overall and whether or not they are on track to meet your long-term goals. 

  1. Compare yourself to the market average. 

It can also be helpful to compare the performance of your investment accounts to the market average. This will give you some context for how well (or poorly) your investments are doing relative to other investors out there. Keep in mind, however, that the market average is just that—an average, so don’t be too discouraged if your investments are underperforming relative to the market as a whole.

  1. Rebalance as needed. 

Last but not least, don’t forget to rebalance your investment portfolio as needed. This simply means readjusting the mix of assets in your portfolio (such as stocks, bonds, and cash) so that it coincides with your goals, risk tolerance, and time horizon. A financial planner may help you better align your assets with your future needs. Rebalancing helps ensure that your portfolio stays diversified and on track over time, so be sure to do it on a regular basis (usually once per year).

Checking in on your investment accounts is a vital part of being a savvy investor. By following the tips above, you can stay on top of your investments and adjust as needed to keep them on track. Ultimately, knowledge is power when it comes to growing and protecting your wealth!