Here we are, at the start of a New Year! This is also a great opportunity to review your investment strategy. Read on for some important questions to ask yourself and your financial advisor to make sure that your investments are working as they should to achieve financial freedom. Your financial broker will be there to help you every step of the way and can give additional insight on each of the topics raised for great investing in 2022.

Question #1: Have there been any significant changes to my personal and/or work life?

Investing as a young person in their first job looks quite different to being a married parent in an established career, or a retiree who is single. Have there been any momentous changes in your personal and/or career life in the last year? Have you been blessed with a new child this year? Have the kids moved out?

If your marital or work status has undergone any major changes, discuss them with your financial advisor, and make any necessary adjustments to your investment stratagy. The best way to approach investing will change as you progress through different life stages. A good consultant will also be able to discuss what changes need to be addressed, since the few examples above are by no means an exhaustive list of the factors to consider.

Question #2: Have my investment goals changed?

Are you still saving towards the same targets?

If you accomplished some of the goals in the last year, you might have new goals that you want to focus on into the future. You might want to direct your resources towards those still outstanding, or you might want to enjoy some additional liquidity.

These are all points to discuss with your broker. Tell them is you have decided that your focus has shifted and ask about the best way to achieve those new objectives. Get input on what the wisest course of action would be, since how we use our money today has a big impact on what options we can enjoy tomorrow.

Question #3: Have my investments yielded expected results in the last twelve months?

Have your investments performed in line with the stated objectives of the financial vehicles that compromise your portfolio? For example, if you have opted for a defensive investment strategy, big swings in performance (up or down) would not be expected. Even in a volatile market, you would expect to see fairly stable performance over the last twelve months. If you pursued a more aggressive strategy, greater unpredictability would be expected.

Are these the results you seen over the last year? Is this in line with your strategy? If your portfolio has not been as stable as you desired, do you need to consider changing financial products?

It is unwise to chop and change vehicles, and you must always take a long-term approach to your strategy, but if necessary course-correction is not taken timeously, you run the risk of falling short of your objectives. This is why sitting with a trusted advisor is so invaluable. It will help you to avoid switching to products that might be at the top of their cycles, which will inevitably mean lacklustre returns into the future, rather than sticking to products that are expected to be coming out of their trough and will be leading into their expansion.

Good advisors will keep you on track when you need to stick it out, or will conversely be able to see when you do need to change investment vehicles or products.

Question #4: Are my investment goals being met as my investments are meeting their own benchmarks?

Financial products have their own points of reference for assessing performance. For example, it is unreasonable to expect a fixed deposit to perform in the same way as an annuity, or vice versa. One must judge their performance based on their own individual yardsticks. The plethora of options that fall under the various categories adds to the complexity of measuring performance.

This underscores the importance of investing in products which will realise your goals. If you are saving for an overseas trip, a retirement annuity is not the way to go.

Speak with your advisor to confirm that your investment goals align with your investment products. You need to make sure that the products are on track by their own criteria of returns, and that those returns are going to allow you to achieve your objectives. Is your portfolio on track in both of these categories?

Question #5: Have new opportunities or risks emerged, and how can I take advantage or prepare for them?

There are new products being developed each year, as well as legislative changes taking place all the time, that could have an impact on your investments. Ask your consultant if there are any new opportunities to consider which could work to seeing your goals reached, and to ensure that you amortise any new risks that might have developed over the last twelve months.

If markets are either very low or very high, it would also be wise to either maximise or minimise risk considering this status. This is again where a professional’s advice is necessary to make the best decisions.

Question #6: Have any significant changes taken place where I am entrusting my investments?

Remember: overall, investing must focus on the long term. Solid investment decisions will weather just about any annual turbulence. With professional input, taking the long view will yield you the necessary results. Market factors obviously play the biggest role in how investments perform.

But every so often, there can be internal changes in an organisation that could impact the long-term record of that investment company. This could be such things as a change in ownership or the loss of a key person.

Each year make it a point to confirm that your money is being handled in the way you originally intended.

If you have no investment strategy in place, act now!

If you haven’t begun investing, do not delay! Time is of the essence and starting later could mean the difference between having millions saved when you retire, or having too little in your nest egg.

Partner with Morebo to achieve your investment goals

This is by no means an exhaustive list of pertinent questions, but they are definitely a good place to start in assessing if you are on track with your investments. Call us today to ensure that you achieve the financial goals you have set for yourself, both short and long term. Morebo has a proven track record in personalising strategies to see our clients achieving their investment goals, whether that be saving for an overseas trip or investing for retirement, and everything and anything in between.

We want to hear from our clients about any of the above questions, and make regular contact with them to ensure that everything is on track to realise their objectives. Our lines are always open should anyone desire to pre-empt the contact.

We wish our clients, new and established, and their families, a prosperous 2022, and look forward to journeying with them this year and beyond, navigating through whatever the next part of the voyage brings our way.

PLEASE NOTE: This article does not amount to personalised financial advice, and must not be construed as such. Please see our disclaimer for more details. Contact Morebo today to talk with an expert on how best to reach your individual financial goals.

Bibliography/Further Reading:

https://www.forbes.com/sites/forbesfinancecouncil/2020/01/30/13-important-details-to-review-with-your-financial-advisor-at-each-check-in/?sh=3c04fb7595f9

https://www.moneyweb.co.za/financial-advisor-views/reviewing-your-financial-plan-20-circumstances-which-may-necessitate-a-review/

https://www.fidelity.com/viewpoints/personal-finance/5-things-to-review-annually

5 Questions To Ask In Your Annual Review

https://www.merrilledge.com/article/investing-through-lifes-stages

https://www.forbes.com/advisor/investing/retirement-investing-checkup/

https://www.cnbc.com/select/how-often-should-you-check-your-investment-portfolio/

https://smartasset.com/investing/types-of-investment

Other South African Financial firms:

https://www.netto.co.za/financial-planning-annual-review/

https://www.allangray.co.za/latest-insights/personal-investing/how-to-review-your-investments/