7 Questions to Ask Yourself Before Changing Your Investment Strategy

Jun 3, 2020 2 min read

Has something changed since you started investing that has you considering whether or not now’s the time to reconfigure your investment strategy? Life circumstances change, and your investments should reflect those changes, but be sure you’re making changes for the right reasons and at the right time. So, before you make a change to your personal investment strategy, ask yourself the following questions.

  1. Have My Circumstances Changed?

    If you’ve had a major life event, it’s a good idea to re-evaluate your portfolio. Life events can include starting a new job, getting married or divorced or adding a child to your family. These life events likely will have changed your financial situation and impacted your goals. When your circumstances and priorities shift, your investment strategy should reflect what is now important to you.

  2. Do My Actions Align With my Investment Strategy?

    It can be easy to get caught up in what’s currently happening, but it’s important to remember your goals and strategies. Regardless of the market performance, if your investments align with your long-term strategy, the best option is to continue on the course. If you’ve recently been making choices that don’t align with your personal investment strategy, but it is still the best path to your goals, you might consider changing your investments and evaluating each choice with that in mind.

  3. Has My Risk Tolerance Changed?

    There are a variety of factors that influence your risk tolerance, but one of the most important components is your investment horizon. Ask yourself: “Has my financial timeline changed?” For example, if you’ve decided to move your retirement date back or forward, this might change your investment strategy. Your financial situation or a change in your risk preferences could also trigger tweaks to your investment portfolio.

  4. Do I Have More Money I’d Like to Invest?

    Maybe you’re thinking you’d like to ramp up your investment contributions. This could be a good time to re-evaluate your current portfolio and ensure it’s working as best as it can. Because you have additional funds, this is a prime opportunity to rebalance your portfolio. Your portfolio naturally falls out of balance based on the performance of different types of investments. Rebalancing allows you to ensure that the percentage you allot to each asset class in portfolio aligns with your goals.

  5. Are My Investments Underperforming?

    If you have a long-term investment strategy, a bad week, month or even year may not be cause for concern. However, consistent poor performance over several years may yield a legitimate concern and reason to change your investing strategy. If an investment is underperforming, evaluate the reason you first decided to add it to your portfolio. If you made a poor decision or that reason is no longer valid, it may be time to make a change in your investment strategy, even if that means taking a loss.

  6. Are My Investments Diversified Enough?

    Diversification means putting your investment eggs in many different baskets to limit your risks. It’s always good to have a broadly diversified portfolio that can help protect you. If you’ve been investing too heavily in one area, it may be time to rebalance.  

  7. Am I Working With a Financial Advisor I Can Trust?

    Your financial goals require more than a one-size-fits-all approach. At Farm Bureau Financial Services, our approach to financial advising is unique to you and your goals. We provide a number of investing products to get you where you need to be. Meet with a Farm Bureau Financial Advisor to review your current strategy and outline a plan that meets your needs today and your goals for tomorrow.

Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.