How can you monitor and adjust your investment strategy?

It starts and ends with managing risk. I always ask my clients, "How much of your money can I lose and still be your advisor and friend?"

That's a great point! Setting clear goals is essential before starting to invest. The SMART criteria are a great way to ensure your goals are well-defined and achievable. By setting specific, measurable, attainable, relevant, and time-bound goals, you'll have a clear roadmap for your investments and be able to: - Choose the right investment mix for your goals - Track your progress and stay motivated - Adjust your strategy if needed to stay on track - Avoid unnecessary risks or conservative investments that may not help you reach your goals Remember, clear goals will help you stay focused and disciplined in your investment approach, giving you a better chance of achieving financial success.

Be as clear on what you won’t do as what you will do. For example what you won’t invest in, what you won’t do when markets get volatile, what you won’t buy/spend money on.

This is often the hardest part. Many investors rarely commit to goals nevermind financial ones. Yet, it helps to have some sort of blueprint or yardstick to measure. The goals can keep changing but the structure and outline of the blueprint ought to remain aligned with the vision of the investor. This is why it helps to review these every 6 months or so to see if anything has changed.

I recommend checking your portfolio performance weekly. Making use of financial internet sites keeps you apprised of major change developments in your portfolio! Diversification of investments is always the safest route to take.

Set your expectations in advance. Decide what you’ll do so you’re disciplined, not emotional in your review, or unrealistic in your expectations. You’ll want to schedule regular reviews so you’re keeping track of your portfolio. But balance vigilance with patience. Think about what would happen if you planted a tree and pulled it up out of the soil every day to check the roots and see how it was growing…..it wouldn’t! Investments take patience. Check your portfolio on a regular and reasonable schedule, and make sure to compare them relative to similar investments and benchmarks.

Just don't review 'too regularly'! Once a quarter or once in 6 months is sufficient. But do not look at your portfolio everyday! Hire an advisor (a flat-fee fiduciary preferably) and he/she will monitor your portfolio and pester you when required. It's their job. They will call you when required. You call them when required, but not every time the portfolio goes down! Your job is to enjoy life!!

One of the first things you hear about investing is “buy low, sell high”. Makes sense! But, easier said than done. Why would I want to sell a winner and buy a loser? Logical on paper, but emotionally harder to do. That’s why smart investors take the emotion out of it—for example, by automating their rebalancing, setting up and sticking to a schedule, or setting predetermined ranges for rebalancing and sticking to them no matter what.

If your goals, risk tolerance, or time horizon changes, then your strategy may have to also. Be ready to shift when things change. You don’t necessarily have to do this by wholesale changes— you can do that with new investments (for example by adding more or less to one or another area), or by gradually implementing changes. One non-investment related item that’s often overlooked is beneficiary designations. Make sure all your accounts have the right beneficiaries as life goes on.

Hiring an advisor gives you someone to help you create, implement, AND stick to a plan. Investing plans can get off track when investors deviate from the plan in the face of volatility or fall prey to the two pillars of emotional investing: fear and greed. An advisor not only takes on the work of the details, but also coaches you when things get rocky, and helps you walk through and make decisions aligned with your plan, and guided by professional experience.

Make sure the professional you hire is a fiduciary and one who earns a flat fee regardless of the size of your portfolio. Chances are that they will put your interests first and foremost. People with a CWM or CFP nomenclature are more likely to be flat-fee fiduciaries, but it's better to check and do your homework. Ask questions before hiring.