Preventative Maintenance for Your Retirement Portfolio

Preventative Maintenance for Your Retirement Portfolio

I have spoken before on how to rehab your portfolio and return to investing after suffering an investment ‘injury’. In this post, I will discuss the idea of preventative maintenance and how to incorporate these concepts into your investing.

What is Preventative Maintenance?

There is a concept in the training space known as preventative maintenance. This is where you take action before you get injured to reduce the risk of injury altogether. This can include, but is not limited to:

  • Getting enough sleep
  • Proper Nutrition
  • Proper Hydration
  • Allowing adequate time in between training sessions to recover
  • Adapting your training to your current abilities
  • Performing exercises to strengthen potential weak or problem areas
  • Stretching
  • Soft-tissue mobilization work
  • Seeking professional guidance, therapy, or coaching

I wanted to include things that may seem obvious, but are often neglected. Meaning someone may want to pay for expensive treatments or recovery devices, but doesn’t get enough sleep and eat very poorly. Doing the basic things well is a simple concept but difficult to execute consistently.

Doing these things will not guarantee you won’t get injured, since there are factors you cannot control. Preventative maintenance, instead shifts the focus on things you can do that are directly in your control to reduce your risk of injury. 

What is Preventative Maintenance for Your Retirement Portfolio?

When investing for retirement there is a benefit to regularly monitoring your portfolio and making periodic adjustments. This is because over time the composition of your portfolio is likely to change due to the uneven nature of the financial markets. A well-diversified portfolio will have assets that behave differently and growth will not be uniform.

Making many minor periodic adjustments to keep you in line with your long-term investment strategy can reduce the risk of having to make a major investment choice with short-term emotions clouding your decision-making

Three Preventative Maintenance Strategies for Your Retirement Portfolio

1. Revisit Your Purpose for Investing

We feel it is important to have a reason behind your investment strategy. Understanding your purpose can be helpful when there is a lot of uncertainty in the markets.

However, it is possible your priorities could change and you should ask yourself:

  • Is my current strategy still appropriate given any change in circumstances?
  • Am I still investing in a way that is serving my goals?
  • Am I taking too much risk?

2.Review the Asset Allocation of Your Portfolio

Once you revisit your purpose for investing you can look at how your portfolio is allocated. You can view this on an account-by-account basis, but there is also a benefit to looking at the overall allocation of your total portfolio since you likely have stocks, bonds, and cash in a number of places.

I have provided a worksheet you can use to calculate your overall portfolio across all of your accounts.

Once you know your overall asset allocation you can ask yourself:

  • Is my current allocation different than when I created my investing strategy? If so:
    • What do I need to sell and what do I need to buy to get back to this allocation. This concept is known as ‘Rebalancing’ your portfolio.
  • Are you currently taking any money from your portfolio or do you plan on taking any money out of your portfolio within the next 5 years? If so:
    • How much?
    • From which account will these funds becoming from?
    • Do you already have assets earmarked for these expenses?
    • Will there be any tax consequences from these distributions?

3.Investment Due Diligence

The third thing I will discuss is a review of what you are investing in. The specifics of what you are investing in are often overemphasized by the financial media. In reality, your individual investments could be very boring. Meaning your investments could be in low-cost broad-based funds that are well diversified across the financial markets. 

With that being said it is a good idea to review the fees you are paying for your investments and compare what you are investing in with other similar investments to see if their relative performance is adequate.

If you hold active funds or individual investments, this process should be more thorough and more frequent in nature. I will not detail what this due diligence process would consist of since it is outside of the scope of this article.

The Role of a Financial Advisor

The alternative to performing the tasks yourself is working with a financial advisor who would perform these duties on your behalf.

It’s important to find a financial advisor who understands your reason for investing and can communicate their investment process to you in plain English.

There is no single right answer to investing for retirement.

To learn more about how you can optimize your investment and retirement planning needs, click here to learn more about Our Process.


Feel free to email us at info@westernreservecm.com with any questions you have.


Gage Paul, CFP®, RICP®, EA
Gage Paul, CFP®, RICP®, EA

Gage Paul is an investment advisor at Western Reserve Capital Management. He works with the firm’s clients to create sustainable financial plans and investment strategies.

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