Check in on your financial plan’s health for peace of mind in new year
Q: I’m wondering: Is my current investment allocation is still good given where I am in my life?
A: If it’s been more than a year since you last reviewed your investment portfolio, now is an excellent time to reassess. As we all know, life is not linear, and over time markets evolve, goals shift, and your asset allocation — the mix of stocks, bonds, cash, and other investments — should adjust over time as well. Your portfolio should be designed to support your goals, both current and future.
The amount of risk you were comfortable taking five or 10 years ago may not match how you feel today. Your portfolio should reflect not only your capacity to take risks, but your willingness to do so. When headlines focus on volatility, recessions, or sudden drops, how do you feel? Do you lose sleep thinking about what would happen if we had a repeat of 2007 – 2009? If market swings are causing you stress or your portfolio feels too aggressive (or not aggressive enough), it may be time to revisit your allocation. Your portfolio is a tool — its purpose is to support your goals. Your allocation should allow you to sleep well at night without feeling like you are on an emotional roller coaster. Your peace of mind is just as important as your portfolio return.
Major life events can dramatically shift your financial picture. Marriage, divorce, the birth of a child, a career change, or selling a business can all have an impact on your risk tolerance and long-term goals. They can also affect your planning horizons, income needs, and financial responsibilities. The key is to have a plan — it can always be modified to reflect your new goals.
Receiving an inheritance may also call for a fresh look at how your assets are invested. The extra money may allow you to move into the “fast lane” and spend more time doing what you truly enjoy. Perhaps the additional funds would allow you to take less risk with your portfolio and still achieve your goals. An inheritance, or other meaningful financial windfall, can also change your long-term planning assumptions along with your tax and withdrawal strategy. Be thoughtful about how you integrate the funds into your plan.
Even without major life changes, portfolios naturally drift as markets move. Strong performers may become overweight while others lag. Rebalancing keeps your strategy intentional and aligned with your goals. It’s OK to take gains off the table and sell losers to take advantage of potential tax losses.
As you move closer to retirement or to a point where you want to access your investment funds, protecting what you have built may be more important than maximizing growth. Adjusting your allocation to reduce risk is an option; but remember, someone leaving the workforce at 65 could live another 30-plus years in retirement!
As 2025 comes to a close, it’s a great time to pause and reflect not just on what has happened in the markets, but what has happened in your life. A financial plan is not something you “set and forget”. It’s a living, breathing strategy that is meant to change as your priories and goals change. Your investment allocation/strategy should reflect your life today, your values, and your goals. Double-checking where you stand will allow you to have clarity and peace of mind going into the new year.
Dottie Bourlier, CFP®, TPCP®, MBA is a financial planner at Focus Partners Wealth in Indian Harbour Beach. Contact her at 321-428-4555 or [email protected].
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