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Asset allocation

How your investments are divided between equities, fixed income and cash investments will greatly affect your returns and risks.

Be sure your allocation properly reflects your time horizon and risk tolerance.

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Equity diversification

Do you own enough different stocks to reduce the potential impact of one poorly performing stock without owning so many that it is impossible to monitor them?

Many advisors suggest owning at least a couple of stocks in at least 4 to 6 industries.

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Review of individual stocks

Review your thoughts on why you originally bought each stock to determine if the reasons are still valid.

Have there been fundamental changes in the company's business or changes in its industry that should prompt a deeper analysis of the company?

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Bond maturities

Remember that bond values change in the opposite direction of changes in interest rates.

Should you adjust your bond maturities in light of the current interest rate environment?

Consider using a "ladder of maturities" approach to improve your overall yield without taking excessive interest rate risk.

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Taxable vs. tax free bonds

Is your tax bracket high enough to justify owning tax-free bonds instead of taxable bonds?

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Cash positions

Short-term interest rates are very low.

Examine whether using CDs could improve the return on funds currently in money market funds or savings accounts. Factor liquidity needs into your decision-making.

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Tax issues

Are there capital losses you can and should take? Net capital losses can offset other income up to $3000 with unused amounts carried forward.

When considering selling a stock for a gain, do you consider that holding the stock for more than a year will enable you to use the lower long-term capital gains tax rates?

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Broker review

The recent stock market has not been easy for anyone, including your broker. However, as a client, you deserve attention and service.

Does the broker stay in touch?

Has the broker been responsive to your inquiries?

Has there been any litigation against the broker?

Do you believe your broker can provide the expertise and service to meet your needs?

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Mutual funds

Are your reasons for selecting your mutual fund investments still valid?

Have there been changes in the nature of the fund or the portfolio manager that should be evaluated?

Are there other funds within the "mutual fund family" that are better suited for your needs and that you could switch to without incurring another commission?

Are you considering using "dollar cost averaging" as a way to make new mutual fund purchases?

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Investments within IRAs

Have you included your IRA holdings in determining your overall investment strategy?

If you own CDs within your IRA, have you chosen maturities that provide the best returns?

Are the mutual funds, stocks or other investments in your IRAs still appropriate?

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Investments within employer retirement plans

Have you included your retirement plan holdings in your overall investment strategy?

Are the investments or mutual funds currently in your plan still appropriate?

Have you recently reviewed how current additions to your plan are being invested?

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Periodic monitoring

Do you regularly review your investments and your investment strategy?

How has your portfolio performed recently, both on an absolute basis and in comparison to general market conditions?

Consider creating a written "investment history" with reasons for your investment decisions. It could help identify what is working and what is not working.

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