Life and circumstances are always changing. No matter how sound your financial plan was when it was created, revisiting it periodically will help ensure that it meets your current needs.
Schedule an annual review
An annual review is an opportunity to revisit your strategy and make sure that your plans are still on track. You can take stock of how your investments have performed over the past 12 months, and make any necessary adjustments if there have been any significant changes in:
Your personal circumstances. Changes in your life situation, such as getting married, pursuing a career opportunity in a different country, or receiving an inheritance, can have a huge impact on your financial strategy.
Your objectives. The mere passing of time can change your investment outlook. For example, if you are within 10 years of retiring, you may be less able to tolerate the risk of a capital loss. You might decide to increase the conservative investments — such as fixed-income securities — that you hold.
Your financial situation. If you’ve recently finished paying off a major expense, such as a property or business, it can have a substantial effect on your cash flow. During your annual review, you can revisit your current cash flow needs, allocating any increase to meet your long-term investment objectives.
Your estate plan. Ask yourself if your estate plan still meets your needs. For example, does your will need to be updated to take into account children or grandchildren or additional assets you have acquired since your last review?
Your immediate future. You can also look forward to the coming year, helping to plan suitable strategies to deal with anticipated events, such as a marriage, birth of a child, or move to another country.
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