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How often do you review your investments?

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How often do you review your investments?

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If you rarely check your investments, how do you know if your money is in the right place and working hard enough for you? While paying your hard-earned money into an investment can often feel like the difficult part, when it comes to successful investing this is only half the battle. You also need to choose the right investments and review your portfolio regularly. You may think you have a sizeable pot that will give you a good level of financial security but in reality, it may not live up to your expectations.

Why is it important to regularly review your investment plan?

The investment landscape has changed massively over the last 5 to 10 years. People who have had investments for a long time often initially set them up with a particular funding pattern in mind and with a certain investment approach that has not been changed since the investment was set up. When they are approaching their selected investment horizon, if they have not reviewed their investment position they may well find that the investment is not going to achieve what they want it to. And that their investment approach became unsuitable many years earlier. This is due to a number of reasons:

  • The ways in which you can invest are much broader now than they were in the past.
  • The investment opportunities are far greater than they used to be.
  • The industry itself has become far more sophisticated.
  • The stock market moves in cycles. What may be a great investment today may not necessarily be a great investment tomorrow.

I often find that people do not appreciate these changes or understand how the different options could benefit them. An investment review is essentially a financial checkup, giving you the chance to look at everything with a financial adviser to see ‘Am I heading where I want to go?’ Ideally, you should review your investment at least once a year. It is important to sit down with a financial adviser and look at what you have, what your options are and what lies ahead for you personally.

Why seek the help of a professional adviser rather than just reviewing your own investment?

The danger is that often that you do not know what you do not know. If I wanted to build myself a new house, I would employ an architect, surveyor and builder because honestly, it is not something I could do myself. I do not have the knowledge or the skills required! When it comes to investing, if you are not talking to someone who is suitably qualified, you will probably be ill-informed.

For example, I recently met a potential client who wanted to discuss buying an annuity using her pension fund. She had a lot of money in a fixed deposit and other investments. I asked her why she wanted to buy an annuity and she said ‘well that’s what you have to do, isn’t it?’ I told her no, not necessarily, and an annuity might not be the best option for her. After looking at her other investments and assets, she could take an income from her other investments for many years without even needing to touch her pension fund. Therefore, by not using her pension fund, she can extend the number of years on which she can receive an income that will sustain her for the rest of her life. Moreover, if she can use other income sources to fund her retirement, she may be able to pass her pension on to your beneficiaries.

Related: 5 Reasons to use a Financial Advisor instead of doing it alone

What aspects of investment planning are often overlooked?

We have seen that choosing an appropriate financial product is near impossible for an individual investor. Investing, especially without a help of a financial adviser nowadays is not recommended, unless you have the skill and the knowledge to do it yourself. In fact, buying a financial product is probably one of the most complex, challenging things we do, given the growing variety of products and the greater amounts of information investors are expected to know.

Over the years, South Africans have moved from traditional banking products to unit trusts as a basic saving option; attracted by the promise of better returns. Unit trusts also came with choices to accommodate the growing demand. Investment managers can now offer you many choices, differing in where they invest, risk profile, different strategies and what type of returns you can expect. By the end of September 2018, investors could choose from about 1 200 unit trust funds! Which one is right for you? How do you decide which one to choose? These are some important aspects to consider when making an investment.

Adding model portfolios to our service offering

A model portfolio will provide you with a combination of unit trust funds which are professionally researched and which use the process of blending various asset classes, investment managers and investment styles to create an investment portfolio. Our model portfolios are developed to suit a range of different investment profiles to help match your portfolio to your needs and objectives. We do this so our investors:

  • Receive the same returns irrespective of their portfolio size.
  • Have a single entry into a selection of quality investment managers.
  • Have access to an investment solution that is actively managed by our investment team.
  • Have access to our robust unit trust fund selection process and portfolio design.

Happy investing!

Related: Investing in the Stock Market – The Basics



PLUS, we'll send you our Zonotho Personal Finance Starter pack to help you take your financial prowess to the next level!


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Sonwabile is a Regional Wealth Manager at Inkunzi Wealth. He regularly comments about money-related matters on various newspapers, radio and television. Sonwabile runs a popular Facebook Page (Ask Sonwabile) that tackles individual questions about money and wealth.

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