The power of scheduled investment reviews

At Waugh McDonald Wealth Management, we understand that successful investing is as much about managing behaviour as it is about market knowledge. One key strategy we recommend to our clients is adopting scheduled investment review dates rather than frequent, random portfolio checks. Depending on individual needs and preferences, we offer both quarterly and annual review schedules. This approach can significantly improve investment outcomes and reduce emotional decision-making.

The pitfalls of frequent portfolio checking

Constantly monitoring your investments can lead to several behavioural pitfalls:

1. Emotional decision-making: Frequent checking often results in knee-jerk reactions to short-term market fluctuations.

2. Increased anxiety: Regular exposure to market volatility can heighten stress and lead to poor investment choices.

3. Loss aversion: The pain of seeing short-term losses can outweigh the pleasure of gains, potentially leading to overly conservative strategies.

4. Overconfidence:Frequent monitoring might encourage overtrading based on perceived patterns or skills.

The benefits of scheduled reviews

Whether quarterly or annual, scheduled reviews offer significant advantages over random checks:

1. Comprehensive information

Scheduled reviews coincide with the availability of high-quality performance data, expert commentary, and peer group comparisons. This richer information set enables more meaningful analysis and informed decision-making.

2. Reduced emotional bias

By limiting review frequency, investors are less likely to react impulsively to short-term market movements. This helps maintain focus on long-term goals and strategies.

3. Better contextual understanding

Regular intervals provide a broader perspective, allowing investors to see trends over time rather than day-to-day volatility. This helps put short-term fluctuations into context.

4. Alignment with financial goals

Scheduled reviews help ensure your portfolio remains aligned with your long-term financial objectives. They provide opportunities to rebalance and make strategic adjustments as needed.

5. Improved long-term performance

By promoting a patient, disciplined approach to investing, scheduled reviews can lead to better long-term investment outcomes.

Choosing your review frequency

At Waugh McDonald Wealth Management, we offer both quarterly and annual review schedules:

Quarterly reviews:Ideal for clients who prefer more frequent updates or have complex portfolios. These reviews provide timely insights into market trends and allow for more regular fine-tuning of investment strategies.

Annual reviews:Suitable for clients with a very long-term focus or those who prefer a more hands-off approach. Annual reviews offer a comprehensive yearly overview and are often sufficient for well-diversified, stable portfolios.

The choice between quarterly and annual reviews depends on your individual needs, investment strategy, and personal preferences. We work closely with each client to determine the most appropriate review schedule.

Implementing scheduled reviews

To make the most of your investment reviews:

1. Set clear expectations: Understand that the purpose is to assess progress towards long-term goals, not to react to short-term market noise.

2. Focus on the big picture: Use the comprehensive data available to understand broader market trends and your portfolio's performance in context.

3. Discuss adjustments: If changes are needed, make them based on your long-term strategy, not short-term market movements.

At Waugh McDonald Wealth Management, we're committed to helping our clients cultivate the patience and discipline needed for successful long-term investing. By adopting a structured approach to portfolio reviews, you can benefit from reduced emotional stress, improved decision-making, and a greater likelihood of achieving your financial goals.

Remember, successful investing is not about timing the market, but about time in the market. Let us help you stay the course with our disciplined, scheduled review approach, tailored to your individual needs.

For more information on how we can help you implement the right review strategy and achieve your financial objectives, please contact us at info@waughmcdonald.co.ke. Let's work together to build a patient, disciplined approach to your investment journey.