Steps to Complete a Balanced Investment Portfolio

Even the most seasoned of investors can end up with a few loose ends in their investment portfolio, which could be anything from underperforming investments to a piece of unfiled paperwork.

In this blog, we’re going to explore your holdings, running winners and discuss how to pinpoint and root out any failing investments.

By evaluating your portfolio on a broader basis, you can begin to learn how to consolidate and adjust your investments for tax and risk purposes.

Define Your Investment Goals

The easiest way to start the spring-cleaning process is to remind yourself exactly what your portfolio is there for in the first place. There are a few key questions you need to ask yourself in order to define your goals:

  • What kind of money do you want to make?
  • When do you need your target amount?
  • Are you living off your investments or is it designed for growth over time?

These are the first things you need to grasp before you decide how best to proceed.

If the portfolio hasn’t been assessed for a while, then it could be that your circumstances have changed, which means the function of your assets need to be realigned accordingly.

It’s true that most people don’t really have a specific goal for their portfolio, but if it’s purpose-built to pay off a mortgage in a set amount of years, or make a considerable purchase – known as goal-based investing – then taking the time to plot out how you’re going to get there with a bit of thought gives you a massive advantage over the average investor.

Time Everything Perfectly

For portfolio revamps, it’s better to work out a schedule in which you check your progress to avoid overworking. It is possible to look too often, which is why every three to six months is usually recommended for a fund, although shares are a different kettle of fish. Looking too often can give you just a snapshot of the overall unfolding picture, which can cause panic and snap decisions.

In terms of asset allocation, experts suggest confirming them on an annual basis. Individual funds don’t need too much time and attention, but individual stocks are obviously much more volatile, and therefore need a bit more TLC.


Investment professionals are all pretty unified in their opinion on amalgamating all holdings into one area. Fund supermarkets and wrap accounts enable investors to reregister their assets to one account, which means they are all available under one umbrella account.

It might seem like a lot of effort to do this, but once you’ve got everything together, everything is so much easier. Not only are your holdings in one place, but fund supermarkets offer a selection of portfolio tools which can help you with your portfolio tidy up.

Some programmes can understand your funds and inform you where your funds are exposed, offer a breakdown of your asset allocation and what kind of risk you’re exposed to and much more.

Think About Your Attitude to Risk

By now you’re probably well aware of how much money you’re willing to risk and where that risk is likely to come from.

If, for example, you’re looking for your portfolio to achieve your desired goal by a particular time, then you can probably afford to invest your money into high-risk, high-reward areas, as you’ve got the time on your side to recoup any losses should your risky investments turn southward.

The tricky part is knowing how much risk you’re willing to take to get the returns you want. You need to mix up your assets in correlation with need and expectation.


The critical factor in diversification – and successful investment overall – is to disperse your money across different kinds of investment.

Below is five of the most common asset classes and examples of what qualifies under each:

Cash – Savings accounts, bonds

Fixed Interest Securities – Overseas bonds, corporate bonds

Shares – Investment funds, investment pools, life funds

Property – Residential, commercial, buy-to-let

Alternative Investment – Art, wine, gold

Once you’ve examined and moved each of your investments into the categories above, you may find your portfolio is too reliant on one particular area.

Most commonly you’ll find some of the following issues:

  • ‘All my cash is tied up in a single savings account’ – you should consider spreading across other savings accounts and investment funds.
  • ‘I have more than six months’ worth of living expenses available in cash’ – then why not consider moving some of that into shares and fixed interest securities? This is especially relevant if you are unlikely to require this money for five years or more.
  • ‘My portfolio is heavy with shares from a single source’ – an employer share scheme is a good example of where this problem occurs – consider branching out with an alternative investment strategy.

View Your Portfolio as a Whole

By delving into diversification, you will have already completed this step to some extent, but to make a success of your investments, you need to study the minute detail and understand how your portfolio will work holistically.

People often tend to invest in something and then buy another when they have more money, rather than standing back to look at the bigger picture, and really considering whether these items work together. Success depends on guarding yourself against poorly executed, out-dated investments.

It also hinges on knowing what to sell and when. For example, maybe you’re 10% down on a stock, and while this does represent a loss, you must consider whether selling up would give you the capital you needed to make gains in other departments.

Forge Your Own Path

It’s human nature to follow the crowd, but of course, the key to making significant gains with less upfront cost is to side-step the pack mentality.

That being said, it’s easy to be bullish. These days with an unforgiving political and social climate markets have seen prolonged losses and charging in without the proper forethought could mean you are missing apparent opportunities to achieve your goals.

If you do need to make some purchases, scanning the horizon for what the future may hold, can give you an edge over those buying at peak prices. Sure, studying what’s past may give you a good indication of specific patterns and trends that repeat themselves over time, but generally speaking, your answers exist in what’s to come rather than what has been.

If you have any questions, please ask below!