Successful Investors Don’t Simply Set It and Forget It

Heather Pelant shares how reviewing your investments regularly can help you prepare for life's big moments.

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A colleague of mine used to say that reviewing her investments was like getting her teeth cleaned. She dreaded it ahead of time, but loved the feeling when it was done. It provided a sense of taking care of something important, both for today and in the future.

Like your teeth, your investment portfolio needs regular maintenance. For example, remember when you got that first “real” job—you know, the one you studied for in college and that paid benefits? You felt pretty good when you signed up for the company 401(k) and started investing for the future, and you’ve been contributing the max to take full advantage of the company match. Both were important steps to set you up for success.

But what’s happened in your life since then? Have you gotten married, bought a house, had a baby (or two or three)? Maybe those babies are closer to attending college or walking down the aisle. Perhaps going back to school to further, or change, your own career is in your plans. Has your investment plan kept pace?

In our 2014 Global Investor Pulse Survey, we found that the most highly effective investors—those who had accumulated more than 2.5 times the retirement savings of other Americans—didn’t just set it and forget it. They consistently take steps to adapt their investment plan in the face of changing markets and changing lives.

3 healthy financial habits

Consider these healthy habits that the highly effective investors in our survey had in common:

  1. Regularly review finances—Examine all of your investment statements together at least once a year. Are you getting the return you hoped for? How much are fees and taxes cutting into that return? How much money do you have in low-interest cash accounts? Are you properly diversified across asset classes, markets and industries? Think about whether you need to invest more money or make changes to your holdings to meet your goals.
  2. Spend time to get informed—BlackRock Chief Executive Larry Fink encourages all of us to be “students of the market.” That means keeping up with financial news and finding independent information about what is happening in the U.S. and global economies. Our blog is just one place where you can find easy-to-understand insight about what’s happening in the markets today and how it may affect you.
  3. Seek financial advice—Successful investors seek a trusted source for good advice. For example, they are 2.5 times more likely to consult a financial professional. If you feel you don’t have enough money for a personal advisor right now, consider some of the digital advice tools or online resources, which are designed to help you decide where to invest your savings based upon your personal lifestyle and goals.

In short, as your life changes, so should your investment plan. By reviewing, reconsidering and rebalancing your portfolio regularly, you will position yourself for success. Moreover, that sense of being prepared and sure-footed about your financial future will make your smile that much brighter.

Look for more tips from me soon about how to go about forming these good habits.


This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date indicated and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader.

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