Make Your Portfolio Fit Your Blueprint

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Make Your Portfolio Fit Your Blueprint

Once you know what you have, it’s time to find out whether your current portfolio fits your blueprint.

Start with your allocation

Begin by checking your portfolio’s asset allocation. If that doesn’t match the asset allocation you laid out in your blueprint, shift assets among funds and stocks to tailor the mix. If your investments are in taxable accounts, however, you might not want to sell any of them—you may pay commissions to trade out of them, and you may also owe taxes if your funds or stocks have gained in value since you originally purchased them.

Duplicate investments? Consider removing them

Next, weed out redundant investments. If you have three large-cap growth funds, for example, they probably aren’t all equally good. Referring to an online tool such as those offered by Morningstar to see which fund has the lowest expenses and longest-tenured fund manager, as well as a strong long-term risk/reward profile. Analysis reports can provide insight into the funds’ strengths and weaknesses.

Be sure that your portfolio includes core holdings, those investments on which you’re relying most to help you meet your goals. Core investments should be the biggest part of your portfolio.

Finally, fill any portfolio holes, such as a lack of value or foreign exposure, with new investments.