5 steps to a healthy portfolio

5 steps to a healthy portfolio

Most of us have regular medical check-ups so that any health issues can be identified at an early stage and get addressed properly. Our investment portfolios require similar care.


Here are 5 quick steps to ensure that your portfolio stays in good shape.

1. Check if your financial goals have changed

Check if your financial goals have changed

Your investment portfolio should always be in line with your goals. Therefore it is important to re-evaluate if your goals have changed over time. Some goals may have become less important or there may be new goals to work towards. Changes in goals could require adjustments in the asset allocation of your portfolio.

2. Reassess your appetite for risk

Moving through different life stages may affect your appetite for taking risk. Changes in your professional and personal life can also impact your tolerance for risk. You should reassess your risk appetite at least once a year. At Citibank, we remind you when it is time to review your risk profile.

3. Re-evaluate your investment return assumptions

Re-evaluate your investment return assumptions

Market dynamics and structural changes in the economy can affect long term return assumptions. For example, in a low growth and low interest rate environment, expected returns of investments are likely to be lower compared to the last 5 years. It is important to ensure that your return assumptions are realistic in order to ensure that you can meet your long term financial goals.

4. Find out if your portfolio is well diversified

A diversified portfolio can mitigate the impact of extreme sell-offs while helping to protect and grow your wealth over the long term. In a volatile market, a diversified portfolio is likely to provide better risk-adjusted returns. Speak to our Citi Priority Personal Banker to assess how well diversified your portfolio is.

5. Rebalance your portfolio regularly

Over time, your portfolio’s asset allocation is likely to have shifted due to market movements. Left unchecked, this can negatively affect the long term performance of your portfolio. It is important to rebalance your portfolio regularly, as research has shown that asset allocation decisions can account for up to 80% of an investment portfolio’s performance. Citi’s model portfolios can provide you with an asset allocation which is in line with your risk tolerance.

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