Detox your portfolio in January 2014

23 December 2013
 

Make reviewing your portfolio one of your new year’s resolutions says Bestinvest

The start of the new year is often a time when people set themselves personal goals for the year ahead. When it comes to your investments, it also makes sense to periodically stand back, appraise your goals and get your investment strategy back into shape for the coming year.

However many investors forget to regularly review their portfolio and instead make ad hoc choices for a new ISA or pension contribution at the end of the tax year, often based on whatever is flavour of the moment and without reference to their existing holdings. In contrast, by appraising your portfolio early in the year, it enables you to have a clearer idea of what you need to achieve ahead of making any further investments by the end of the tax year on 5 April.

Bestinvest’s Managing Director Jason Hollands said: “2013 saw a big disparity between the stellar returns delivered by developed world stock markets and those posted by emerging markets and bonds. Big differences in performance between asset classes and markets means that a portfolio that was carefully planned just 12-months ago is now going to look very different.

“Even originally well planned portfolios will need to be periodically reviewed and rebalanced, as allocations to different asset classes and markets naturally drift over time. That can mean the risk-profile of a portfolio can change materially, potentially no longer matching your needs or goals.

“2013 was also a year of great change and upheaval in the fund management industry with a number of high profile manager changes announced such as Anthony Bolton, Richard Buxton and Neil Woodford. Manager change is one of the many reasons it is important to regularly monitor your choice of holdings.

“The key criteria to consider when reviewing your portfolio should include: understanding the level of risk you are exposed to and whether you are comfortable with that, how well balanced your asset allocation is and if it needs change (either by switching existing holdings or when making new investments), and of course the quality of the underlying funds and stocks. However the problem for many investors is that they don't regularly review or rebalance their portfolios. They tend to buy, hold … and forget. We think this risk is particularly acute for those investors who have parted company with their financial adviser since RDR, and those who have been ditched by their bank.”

To help investors, last year Bestinvest launched a Free Investment Report Service & Tool (FIRST). FIRST, which has been used by over 66,000 members of the public, provides investors with analysis on their investments to show how much Risk the portfolio is exposed to (based on its volatility), how well balanced the Asset Allocation is (against our models), and our view on the Quality of each fund held.

FIRST is easy to use and free-of-charge. Users can either self-enter their portfolios online or send Bestinvest details of their holdings and a report will be prepared for them. Almost 12,000 underlying investments can be covered by First, including unit trusts, OEICs, investment trusts, shares, ETFs and unit-linked pensions funds.

For more information on FIRST, please visit: www.bestinvest.co.uk/first

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Important information:
The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. Past performance or any yields quoted should not be considered reliable indicators of future returns. This article does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact one of our advisers.

Different funds carry varying levels of risk depending on the geographical region and industry sector in which they invest. You should make yourself aware of these specific risks prior to investing.

About Bestinvest
Founded in 1986, Bestinvest has grown to become a leading private client investment adviser, looking after £5 billion of assets. We offer a range of investment services from the Online Investment Service for self-directed investors to Investment Advisory and Investment Management services for clients who do not have the time or inclination to manage their own investments.

All of our services are underpinned by rigorous research aimed at identifying those fund managers we believe will deliver long-term superior performance. We also have a team of expert financial planners with nationwide coverage to help clients with their pensions, retirement or Inheritance Tax planning. At Bestinvest, we pride ourselves on offering the highest levels of professionalism and expertise with transparent, competitive prices. We are pleased that our greatest source of new business is from personal referrals from existing clients.

Bestinvest has won numerous awards including UK Wealth Manager of the Year 2013, Best Wealth Manager for Investments 2013, Best Stockbroker for Customer Service 2012 and 2011 Self Select ISA Provider of the Year as voted by readers of the Investors Chronicle and the Financial Times.

Bestinvest’s Select service was recently ranked as the highest-scoring investment platform when judged on cost, service, range of features and breadth of investment choice by specialist consultancy The Platforum.

Headquartered in Mayfair, London, Bestinvest employs more than 200 staff and has an extensive network of regional offices. For further information, please visit: www.bestinvest.co.uk

About Tilney

Tilney is a leading investment and financial planning firm that builds on a heritage of more than 150 years. The Tilney Group operates under the Tilney brand for Investment Management and Financial Planning and Bestinvest for execution-only investing. We look after more than £22 billion of assets on our clients’ behalf and pride ourselves on offering the very highest levels of professional client service with transparent, competitive pricing across our entire range of solutions.

We offer a range of services for clients whether they would like to have their investments managed by us, require the support of a highly qualified adviser, prefer to make their own investment decisions or want to take more than one approach. We also have a nationwide team of expert financial planners to help clients with all aspects of financial planning, including retirement planning.

We have won numerous awards including Best Fund Platform and Best SIPP Provider at the 2017 City of London Wealth Management Awards; Investment Award – Cautious category in the Private Asset Management Awards; and Stockbroker of the Year, Execution-only Stockbroker of the Year and Self-select ISA Provider of the Year 2015, as voted by readers of the Financial Times and Investors Chronicle. We are pleased that our greatest source of new business is personal referrals from existing clients.

Headquartered in Mayfair, London, Tilney Group employs over 1,000 staff across our network of offices, giving us full UK coverage, and we combine our award-winning research and expertise to provide a personalised service to clients whatever their investment needs.