Step 4: Reviewing and Maintaining your Portfolio.
-In this section, we will give you some guidelines and useful tips on how to ensure that you keep yourself & your portfolio on course to reach your Goals.
In this final step, we would like to help you make sure that you do in fact reach your goals and based on your planning, that you in fact exceed your planning expectations.
Based on the tutorials that you would have worked through by now, you would have noticed that we always err on the side of caution and conservatively project what the outcomes could be for your future Goals. This is not a strategy to make your figures look worse than what they could be but rather a safety net which we build into your planning to guide your expectations.
History has shown that most people are far more emotional about “Under-performance” than they are about “out-performance” and that most people would far prefer to experience a safer and more steady ride to their goals than one of great volatility and uncertainty.
Obviously, this is your Plan and your road to travel so you must choose what suites your situation best.
So what to do next?
Once you have implemented your portfolio, you are now in a position to build on the foundation which you have put in place.
It is vitally important that you ensure that your portfolio of investments, your planning and all related structures are kept current and relevant under all circumstances on an ongoing basis.
Our suggested Review process:
-Follow these steps and you will always stay on track.
Based on your Planning, you would in all likelihood, assuming you are in the accumulation phase of your life, have a monthly contribution strategy towards your portfolio. This strategy would be in line with building your portfolio on an ongoing basis.
You would need to make sure that you follow that strategy or even get ahead if possible and reasonable within your circumstances.
It is VITALLY important to keep to your plan as this is the foundation to reaching your goals.
there are 2 main areas you want to be alert to on an ongoing basis.
A] Be aware of your Economic surroundings.
B] Be aware of your legislative surroundings.
The idea would be to keep an eye on what is happening in the markets and economies around the world and should there be a need at any time, to possibly make some changes to the portfolio you have implemented, these can be done by means of a switch instruction to the administrator.
We do not suggest trying to time the markets as this invariably results in losses and based on data available, when market timing is practiced by most investors, portfolio performance is below average.
However, that said, should you decide to make changes to your portfolio, all necessary documentation is available on the SimplyInvesting website in your “Member Zone“.
There are 3 areas to review here:
1 Portfolio performance:
A] Compare quarterly, annual and since inception values within your portfolio. This will give you an overview of portfolio performance which can then be compared with indices and markets generally to assess performance.
B] It is important to take a Longer term focus and outlook for your portfolio. No one Asset manager, asset class or fund is always a winner. We would suggest you evaluate your funds performance based on a 3, 5 and 10 year performance record.
2 Economic outlook.
Review the broader economic outlook for South Africa and the world (past and future).
Watch the SimplyInvesting Blog posts for regular updates on Economic reviews and commentary that will help give you perspective on markets locally and internationally.
3 Legislative changes
Keep informed about any possible legislative changes that may be coming and the implications these may have for your portfolio and planning going forward.
Any Legislative changes or expected changes will be published to the SimplyInvesting “Members Zone” so keep an eye there for a simple explanation and outline of the implications they may have.
Finally, should you need to or decide to, go ahead and make adjustments to your portfolio.
NB : Be careful not to “chop and change” too much as this invariably leads to portfolio under-performance.
There are 5 areas you need to review at this point in time:
1 Portfolio Performance:
As per your quarterly review, compare quarterly, annual and since inception values within your portfolio. This will give you an overview of portfolio performance which can then be compared with indices and markets generally to assess performance.
2 Financial Planning:
Review your Financial Plan and compare current costs etc (Income, Expenses, Lifestyle, family situation and changes, etc) against projected values in the Plan to ensure that you are on track or ahead of your planning goals. If adjustments need to be made, implement after due analysis.
3 Estate Planning:
Review your estate planning and Wills at these meetings. It is vitally important to make sure that should your circumstances change in any way, that you ensure that your Wills and Estate planning documentation are updated to accommodate these changes.
4 Medical Planning:
Most medical schemes allow you one review per year. Make sure that you carefully assess what your needs have been over the last year and ensure that the Plan that you are on is the correct plan to take you and your family forward through the year ahead. If you feel that you may need other facilities in your plan, investigate what options are on offer and adjust your plan according to your needs.
5 Asset Planning:
It is important to review your asset values annually and to ensure that your insured values are in line with your current assets values. If not, this could lead to a problem should you need to claim. You also don’t want to be paying a higher premium than what is necessary.
We hope that this exercise has given you a good starting point…
We trust that you have enjoyed the journey and learned a lot as your moved through the planning process. We sincerely hope that what your have experienced has added HUGE value and will change your life and the lives of your families for the better.
In ending off we would like to give you a quick overview of what we as SimplyInvesting offer you when you become a client of ours.
Services available when you become a SimplyInvesting
Members Zone online facility.
When you invest via SimplyInvesting, you are automatically enrolled into our Members Zone online facility.
There are also tools in the Simply Investing Members Zone which will assist you in doing many exploratory calculations which you may need to do from time to time, such as bond repayment calculations, car repayment calculations, etc etc.
If you have any questions at any time, you are always welcome to contact us. As I have mentioned a number of times, we are truly committed to helping you and your family achieve your goals and DREAMS. This is our mission and our goal and we will always ensure we do our best to serve you in every way we can.
24/7/365 Access to Your Portfolio
Round the clock, 24/7/365 ability to access and manage your Investments from anywhere in the world.
News letters & Reports
Members Zone is specifically designed to house all information that will assist you in running your personal financial affairs in the most efficient and focused way possible.
Access to all bunch of informational videos, including fund manager interviews, specialist subject interviews etc.
Economic & Legislative Updates
We ensure that all current legislative and economic information is held in a library for your use and reference 24/7/365.
This is a facility where all members can exchange their best ideas and information to help and grow from each others input and sharing.
Life is not about how BIG your Dreams are
How You take ACTION to achieve them!!
We wish you everything of the best in your pursuit of Financial Independence.
If this has been a useful and positive exercise for you, please do tell your friends and family about us.
If you have any comments or suggestions, we would love to hear from you. We are always looking for ideas and better ways that we can make a positive difference in our clients lives.
To end off.. A quote from a book I recently read.
Greatness (Success) belongs to those who have mastered the ability to focus relentlessly on their ambitions (Goals) and Act decisively towards them.