4 signs it’s time to review your investments
Written and accurate as at: Apr 16, 2026 Current Stats & Facts
Investing is a long-term endeavour, but that doesn’t mean you have to be totally hands-off. Below, we explore some key signals that it might be time to check in on your portfolio, and how to go about it thoughtfully.
Have your circumstances changed?
Whether you made the decision consciously or not, your portfolio probably reflects the circumstances in which it was constructed. But as time goes by, you might find it no longer suits your goals, risk tolerance or time horizon.
To take one example, a sudden windfall can completely change how much risk you’re willing to take on. With that extra money to fall back on should times get tough, you might feel more comfortable allocating a greater share of your portfolio to growth assets.
Compare that with someone approaching their sixties. With retirement around the corner – and capital preservation now the main priority – the investment mix that made sense in their thirties and forties might no longer be suitable. Here, it might be wise to shift to more defensive investments.
Has your allocation strayed from your original target?
Let’s say you’ve prioritised growth assets, opting for a 70/30 split between shares and bonds. Following a bull market, your shares surge while your bonds tick only slightly upwards. While you didn’t intend to take on more risk, your shares now make up 80% of your portfolio.
This leaves you with an important decision to make: do you stock up on more defensive assets, or do you accept that your portfolio has drifted away from your original strategy and continue with the higher exposure to shares?
In this example, if you opt for the former, you’ll have a few ways to do this:
- You can sell some of your shares and use the proceeds to purchase more bonds
- You can use new money to top up your bonds while leaving your existing share holdings untouched.
For some investors, purchasing more bonds with money from savings might be easier to handle emotionally, as it won’t involve parting with those shares that are on a winning streak. It can also mean no capital gains tax event is triggered, since no profits are being realised.
Do you find yourself struggling to sleep at night?
Conventional wisdom suggests staying the course when markets are volatile. That’s because the occasional downturn is inevitable, and those who resist the urge to sell have historically been rewarded once the market recovers.
But not everyone will have the stomach for large market swings, and if holding certain investments is keeping you awake at night or impacting your mental health, that might need to be factored into your plan too.
Accepting this will mean accepting a few tradeoffs – you’ll find that your returns will probably be lower if you put more stock in keeping your cortisol levels under control. But if the alternative is abandoning investing altogether, then it might be worth tweaking your portfolio to favour a more defensive approach.
Is your portfolio underperforming?
No portfolio is perfect, and yours will undoubtedly have its share of bad days. But if it’s consistently lagging behind relevant benchmarks, that’s a pretty good sign it needs some attention.
Underperformance might come down to structural problems, such as too much exposure to one sector or asset class. There might even be an element of home bias at play, which is seeing you miss out on growth opportunities beyond the Australian market.
Whatever the case, there are plenty of ways you can give your portfolio a refresh. For example, you could trim or exit underperforming positions and direct those funds to companies with better fundamentals (and hopefully better prospects for growth). Or you might choose to shift your focus to assets with built-in diversification, like ETFs.
Are there downsides to frequent rebalancing?
Before you go tinkering with your portfolio, it’s worth reminding yourself of a few core investing principles. These include:
- Short-term volatility is part and parcel of investing, and by reacting to every dip or surge you might be doing more harm than good
- A portfolio might be underperforming because the broader market is down, and not because of any inherent weaknesses
- Frequent buying and selling can rack up brokerage fees, and these can eat into your returns
- Each sale may trigger a capital gains tax event, and you might not have held an investment long enough to benefit from the CGT discount
- Selling when you think prices have peaked and buying when you think they’ve bottomed out may sound sensible, but getting those calls right is incredibly difficult.
Our investment decisions are shaped by our preferences, personal circumstances, and even our biases. But as both our lives and the market change, it’s sometimes necessary to pause and reassess. This can help you spot small issues early, and make adjustments so they don’t become big ones.
