How frequently should investment portfolio performance be reviewed according to best practices?

How frequently should investment portfolio performance be reviewed according to best practices?

• A. Monthly
• B. At least annually, preferably quarterly
• C. Every two years
• D. Only at the end of the investment term

Answer: (B)

Investment portfolio performance should be reviewed at least annually, with a preference for quarterly reviews, according to best practices. This frequency allows for timely assessment of how well the portfolio is meeting its goals in light of market conditions, changes in investment strategy, and shifts in individual circumstances like risk tolerance or expenses. Quarterly reviews strike a balance between being frequent enough to catch significant market shifts and not so frequent that they encourage reactionary decisions based on short-term volatility. This regular monitoring helps investors to adjust their investment strategy as necessary and can lead to more informed decision-making regarding asset allocation, risk management, and any rebalancing that might be necessary to maintain the desired investment strategy over time. Review at this recommended frequency ensures that the investment strategy remains aligned with the investor's long-term objectives and market realities.

Investment portfolio performance should be reviewed at least annually, with a preference for quarterly reviews, according to best practices. This frequency allows for timely assessment of how well the portfolio is meeting its goals in light of market conditions, changes in investment strategy, and shifts in individual circumstances like risk tolerance or expenses.

Quarterly reviews strike a balance between being frequent enough to catch significant market shifts and not so frequent that they encourage reactionary decisions based on short-term volatility. This regular monitoring helps investors to adjust their investment strategy as necessary and can lead to more informed decision-making regarding asset allocation, risk management, and any rebalancing that might be necessary to maintain the desired investment strategy over time. Review at this recommended frequency ensures that the investment strategy remains aligned with the investor's long-term objectives and market realities.