3 Simple Steps to Review Your Investment Portfolio

Mutual Funds

3 Simple Steps to Review Your Investment Portfolio

Be sure to periodically check your asset allocation to make sure you're taking on the right amount of risk for you.

A periodic review of your investments will reveal whether your allocations are out of balance. A moderate portfolio geared for growth and income typically holds 60% stocks and 40% bonds. An aggressive portfolio—for people with more risk tolerance and a time horizon of ten years or more—typically holds 80% stocks and 20% bonds.

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Step 1

Visit the Instant X-Ray tool at www.morningstar.com. Input your fund and stock symbols in the first column, and put the dollar value or percentage value of each holding in the second column. Hit the “Show Instant X-Ray” button. The service is free.

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Step 2

See at a glance how your portfolio breaks down. The “x-ray” shows how much you have in stocks, bonds and cash, as well as how the assets are divvied up by sector (health care, energy and so on), among other details. It even lists all of the stocks you hold, including the ones in funds you own, ranked by weight.

Step 3

Use the x-ray to pinpoint potential weak spots. Is your portfolio too heavily weighted in stocks? Are you paying too much in fees? The tool compares your annual fees to a similarly weighted model portfolio. If you pay more, look for com­parable lower-cost index funds and exchange-traded funds.

The payoff

Your investments match up with your goals.