Seasons are changing; should your portfolio?

The first cold front of the season has come and gone, bringing thunderstorms, cooler temperatures overnight and the message that the autumnal equinox is almost here … meaning it is time to turn your attention to different seasonal matters than you did a few months ago.

While you’re closing swimming pools, storing lawn furniture and wistfully remembering summer weekends at the beach, you also may want to consider reviewing your financial portfolio to determine whether any transitions should be made there, as well.

Various accounts, equities, savings and other holdings should be reviewed with a simple question in mind: are they working for you in the manner you intended? Do you have the right combination of investments and savings to provide the shortterm cash you need, as well as the long-term growth?

It is worth a few hours of time to review your investments to reacquaint yourself with the performance goals you originally established and determine whether they are on track. Do you have educational goals for your children or grandchildren, is your retirement account progressing as you had planned, or should you make some adjustments?

It is helpful to start by reviewing your portfolio from an overall standpoint, to give you a comprehensive viewpoint of the general direction your finances are taking. Issues such as price-to-earnings ratios, dividend yields and earnings per share can help give you the generalized view you need.

You then can break down the components individually to determine whether they are performing in accordance with your goals. You also should examine the components as they relate to each other, considering they likely are interrelated, even if it doesn’t appear to be that way from a distance.

There are many influencing factors that can affect the performance of an asset. Be aware of those factors to understand current performance with an eye to the future. Major investments and small businesses should be treated the same when analyzing their importance to the overall portfolio.

And while you’re reviewing interrelationships you should remember that geographical issues can come into play, as well. The location of an investment may impact its performance — especially investments that are based in emerging markets, where a host of issues, some positive, some negative, may come into play. Sometimes even the smallest connections can have far-reaching effects and you should be aware of them.

You also should review the impact of taxes on your investments. Have you consulted with your accountant recently? Does your tax adviser agree you are employing smart tax strategies to make the most of your investments without undue amounts being siphoned off by the government?

Your tax burdens can shift, and in many cases, should shift, depending on where you are in your career and what you see as timely priorities. Depending on those priorities — are you saving for future educational expenses or retirement for instance, or moving into a spending phase — you may want to alter your tax burden to give you the best position to ensure that your savings can last through your retirement.

Essentially, you want a portfolio that can protect your investments throughout their life. It is advisable to update your beneficiary designations, as well.

A portfolio review should determine whether performance is as expected and whether your assets ae protected. It isn’t possible to predict every eventuality. But you can take an approach that provides overall security to your portfolio by examining its individual components and their performance. There’s no magic wand that provides impenetrable security, but in the long run, knowledge and common sense may be just as good.

Joseph Matthews is a Financial Advisor with the Wealth Management Division of Morgan Stanley in Fairfield. He can be reached at 203-319-5165 or by email at joseph.matthews@morganstanley.com. Follow Joe on Twitter @jmatthewsMS.