New year’s resolutions

New Year’s resolutions usually feature losing weight, joining a gym or making time to relax. As well as cleaning up your lifestyle, why not use January — a notoriously quiet month for social calendars — to clean up your portfolio? Here are six ways to get your investment overhaul started:

Round up your investments

Investments scattered around in different accounts can be harder to manage. This is especially true of pensions as you may have acquired a few different pensions through different jobs. Consolidating your investments might enable you to have greater control over your investment strategy. It’s reasonably straightforward to do for Isas and self-invested personal pensions (Sipps). But before moving any pensions, make sure you check with each pension provider that you won’t lose valuable benefits or pay exit penalties.

Review risk levels

Markets and asset classes don’t all move neatly in line, so over time your exposure to different investments will change, which means your investments may have drifted into a different risk category from the one you originally chose. Your attitude to risk may have changed over time so check your asset allocation and, if necessary, rebalance to reflect your current attitude to risk.

Do some weeding

Building an investment portfolio that will stand the test of time is what you should be aiming for, rather than going after every hotly tipped fund or share.  Look at how well the funds are performing to weed out any serial underperformers — and seek alternatives. Don’t be emotional about your investments, if they have underperformed, cut your losses and move on.

Keep saving (or start saving!)

The best way to grow your wealth is to use as much of your annual Isa and pension allowances as you can afford. Regularly topping up your tax-efficient investments means you pay less to the taxman – and build a larger fund. The sooner you do this, the more chance you have of benefitting from compound growth – that is growth on growth.

Get what you pay for

Check that you’re not paying over the odds for holding particular funds. Some come with expensive performance fees and some actively managed funds are little more than ‘closet trackers’ that charge fees for active management but are only providing an index-like return.  The same applies to your investment platform – don’t forget to run an annual pricing check at Compare+Invest.

Make your review annual

Don’t make this overhaul a one-off. You should be looking at your investments once a year to make sure you’re on track. By all means keep an eye on your portfolio, but be mindful not to become a stock watcher and be tempted to act every time prices move in an unexpected direction. A long-term investment means there’s time on your side for markets to recover.

Article is accurate at date of writing.