Why Even Long-Term Investors Should Hold Quarterly Reviews - Rodgers & Associates

Why Even Long-Term Investors Should Hold Quarterly Reviews


Many investment advisers say you need to have a long-term perspective to be successful investing in stocks. Warren Buffett says he buys stocks in companies that he intends to hold forever. With this type of long-term thinking, why bother with quarterly reviews?

At our firm, we manage the fixed portion of each client’s investment account using individual bonds that we intend to hold until maturity. The growth portion is invested in mutual funds and exchange traded funds where a high percentage is in passively managed positions. One might think this would make regular review unnec­essary. However, we believe the mechanics of investment selection and periodic perfor­mance against bench­marks is not the reason for a review.

Here are four very good reasons to review your investment plan regularly, each of which can have meaningful impact on your account.

The review meeting is ultimately more about financial planning than just reviewing investment strategy. It facil­i­tates good commu­ni­cation between client and adviser that should minimize surprises. As a result, the portfolio should perform more efficiently, which should also help minimize income taxes.

Rick’s Tips:

  • Long-term investors should still have regular reviews with their adviser to commu­nicate about a variety of financial issues.
  • Overspending is one of the biggest retirement mistakes. Monitoring spending should be covered during a review.
  • There are many oppor­tu­nities for tax efficiencies when investment management is incor­po­rated with tax planning.