Portfolio Not Doing Well? 5 Steps To Fix The Problem

Is your investment portfolio not doing as well as you'd like? Because most Americans cannot save as much money as they want, they rely on good investment returns to make up the difference. But if your returns are lackluster, what can you do about it? Here are five steps you should take now. 

1. Meet With an Advisor. When a DIY approach hasn't worked out very well, most people turn to a professional to help get things back on track. This is also true of your investments. A registered investment advisor can look at your overall plan, your specific investment choices, your goals, and your family situation to help tailor the best choices for you.

2. Check Your Risk Levels. Every investment choice has a risk level. It could be very low, such as with insured bank products. Or it might be high, as with startups or companies that are low-rated. Low-risk items, though, earn lower rates of return as well. If you have favored low-risk investments due to a lack of tolerance for losses, you may be hamstringing your rate of return. In this case, consider rebalancing your risk levels to get a better return while still not going 'all in' on hazardous stocks. 

3. Harvest the Losses. Are there consistently poor performing stocks or investments that are dragging down your overall return rate? Examine each stock or basket of stocks as well as bonds or alternative investment vehicles to determine what are your lowest-performing assets. Consider selling these before the end of the tax year so as to 'harvest' the loss against other capital gains and rid yourself of any dead weight.

4. Think Long Term. Stock market investments don't always perform well. They have natural cycles, often following the state of the economy as a whole. If your portfolio is lagging, look at the market as a whole. Are most stocks in a natural slump or recession? If so, you might simply want to shift your point of view to the long run and keep a steady hand until the economy perks up again.

5. Try Alternatives. If you have some willingness to take on a little extra risk, you may get a boosted return by pursuing alternatives to traditional stocks and bonds. This might include investing in precious metals, investing in a local business or two, using collectibles or art as an additional investment method, or doing peer-to-peer lending. Greater flexibility and risk-taking could get your portfolio out of its rut.

Which of these fixes might work for your own portfolio? Whatever you choose, by taking the right kind of action, you'll help ensure a solid and stable financial future. 

For more information, contact local professionals like those found at Tannin Capital, LLC.