6 ways to give your portfolio a spring tune up

After a cold, hard Canadian winter, there’s nothing like those early signs of spring – the days start to stretch longer and all that snow begins to recede. True, it might still be a while before you can ditch your coat and your snow tires, but there are other ways to mark the turn of the season.

Most people’s spring cleaning to-do list includes the usual items like decluttering the house or cleaning up your garden – but it’s also a great time to check in on your investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition portfolioPortfolio All the different investments that an individual or organization holds. May include stocks, bonds and mutual funds.+ read full definition.

To help get you started, here’s a checklist of six spring cleaning ideas you could do to help keep your portfolio on the right track:

1. Sort it

Gather all your investment accountAccount An agreement you make with a financial institution to handle your money. You can set up an account for depositing and withdrawing, earning interest, borrowing, investing, etc.+ read full definition statements into one file. If your money is spread over different accounts it may be hard to keep track of how you’re doing overall. You might consider whether it makes sense to consolidate some of your accounts to help reduce the clutter. It might even help cut costs.

2. Check your performance

Ask your advisor or investment manager for a detailed report on how your portfolio has performed, not just for the past year but over the last three and five years too. You can use our Portfolio benchmark calculator as a first step.

3. Track it

Ask for a detailed explanation of any gains or losses in your portfolio over the last year. You’ll need this information for your taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition filing.

4. Diversify

Too much exposure to one stockStock An investment that gives you part ownership or shares in a company. Often provides voting rights in some business decisions.+ read full definition or asset classAsset class A group of securities that have similar characteristics. Examples of asset classes include, such as stocks, bonds, real estate or cash.+ read full definition can affect your investment returns. When you investInvest To use money for the purpose of making more money by making an investment. Often involves risk.+ read full definition, you’re exposed to different types of risk and different risks can affect your investment returns. Use this chart to learn what happens to a stock portfolio’s total risk as you increase the number of stocks.

5. Check in with your advisor

When you started working with your advisor he or she would have asked about your goals, risk tolerance, your time horizonTime horizon The length of time that you plan to hold an investment before you sell it. This may be a brief period of time or span as long as decades, depending on your financial goals.+ read full definition and a host of other important details about you. Updating your advisor on your current financial situation is one of the best ways to see how your investments are doing relative to your goals and needs. If they’re not in line, then ask your advisor why – and if necessary make changes. Don’t forget to talk about anything that’s changed in your life – a new baby, illness or a pending retirement could also change how your portfolio is invested. You can access more information in our life events hub.

6. Cost it out

Ask your advisor to list all the fees you paid last year in dollars, including management expense ratio, deferred sales charges and trading commissionsCommissions What you pay to a broker or agent for their services. Often called a “sales commission”. For example, you pay a fee to someone who buys or sell stocks or real estate for you.+ read full definition. No one works for free, but fees can have a significant impact on how your portfolio performs – our mutual fund fee calculator can help you break it down. With the latest cost disclosure and performance reporting requirements, your investment firm should be telling you how your investments are performing and also the charges and other compensation paid to your firm. If you think the fees are too high then consider making changes – shift to lower cost products (i.e., exchange-traded funds) or, if your assets have grown to $250,000 or more, you could think about moving to a discretionary portfolio manager.

Visit InvestmentReporting.ca to learn about the latest cost disclosure and performance reporting requirements and for information on how to understand your investment performance and cost account statements.

Take action

Visit our tools and calculators hub to access calculators including RRSPRRSP See Registered Retirement Savings Plan.+ read full definition, TFSATFSA See Tax-Free Savings Account.+ read full definition, Portfolio benchmarkBenchmark A yardstick that you can use to measure the performance of an investment. Example: a stock market index may be a benchmark you can use to compare how well your own stocks are doing.+ read full definition and many more.

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