A Fresh Start: Why the New Year is the Perfect Time to Appraise Your Investments
As the calendar turns to a New Year, many of us set resolutions about health, habits, and personal goals. Yet one area that often gets overlooked is our financial health - specifically, our investments. The start of a New Year presents a natural opportunity to reflect, ensuring your investment portfolio is truly working for you.
If you've been managing your investments for a while, or if you've been delegating this responsibility to a professional, the beginning of the year is an ideal moment to ask some fundamental questions: Are my investments aligned with my goals? How do I appraise performance, net of the fees I’m paying? Do I even understand what I own?
Why Now?
There's something psychologically powerful about January. It's a fresh start, a clean slate. This mindset makes it easier to tackle tasks we might otherwise postpone. When it comes to investments, this matters more than you might think.
Throughout the year, it's easy to let investments run on autopilot. Markets rise and fall, statements arrive (often unread), and life gets busy. But the New Year provides a moment to step back and take stock. It's also typically after year-end statements have been issued, giving you a complete picture of how your investments performed over the past twelve months.
The Questions Every Investor Should Ask
Whether you manage your own investments or work with a professional, here are the key questions worth considering as you appraise your portfolio:
1. Do I understand what I own?
This might sound basic, but it's surprising how many people hold investments they can't clearly explain. If you couldn't describe your portfolio to a friend in simple terms, that's a red flag. Understanding what you own - and why you own it, is fundamental to confident investing.
2. What did I actually pay in fees last year?
Fees matter enormously over time. Yet many investors struggle to identify the total cost of their investment arrangements. Look beyond the headline management fee. Are there underlying fund charges? Platform fees? Transaction costs? Performance fees? Add them all up. If you're paying more than 1.5-2% annually across all costs, it's worth questioning whether you're getting value for money.
3. How did my portfolio perform relative to a sensible benchmark?
Absolute returns tell only part of the story. If your portfolio returned 8% last year but a comparable benchmark returned 12%, you've underperformed by 4%. Understanding relative performance helps you assess whether your investment strategy (or your investment manager) is adding value.
4. Is my portfolio still aligned with my goals and risk tolerance?
Life changes, and so should your portfolio. Perhaps you're closer to retirement than you were when you first invested. Perhaps your income has increased and you can afford to take on more risk. The New Year is a good time to reassess whether your portfolio still fits your circumstances.
5. Am I comfortable with my level of involvement?
Some people are happy to delegate investment decisions entirely. Others want to be more hands-on but lack the confidence or knowledge. There's no right answer, but it's worth reflecting on whether your current arrangement matches your preferences. If you feel disconnected from your investments, or if you wish you understand them better, that's worth addressing.
Common Red Flags
As you conduct your review, watch out for these warning signs:
Opacity around fees. If you've asked your adviser or wealth manager for a clear breakdown of all costs and haven't received a straightforward answer, that's concerning.
Lack of clear reporting. If your statements are confusing, or if you can't easily see how your portfolio is positioned, this creates unnecessary friction.
Concentrated risk. If a significant portion of your portfolio is held in a single investment, sector, or geography, you may be taking more risk than you realize.
Underperformance without explanation. Markets go up and down, but if your portfolio has consistently underperformed over several years without a clear reason why, it's worth investigating.
Feeling disempowered. Perhaps the biggest red flag is simply feeling that your investments are a black box - no matter how your investments are managed, you should at least have a basic grasp of what you own and why.
Taking Control in 2026
If your New Year review reveals issues, you have options. For many people, the answer isn't to hand everything over to a traditional wealth manager charging 1-2% per year. Nor is it to go it entirely alone without guidance.
There's a middle ground: learning to manage your own investments with the right support. This approach offers several advantages:
Lower costs. By removing the ongoing percentage-based fees that traditional managers charge, you can keep more of your returns.
Greater control. You make the decisions, which means you understand exactly what you own and why.
Transparency. You see all the costs, all the holdings, and all the performance data clearly.
Flexibility. You can adjust your approach as your knowledge and confidence grow.
The key is setting the right foundation - understanding how to appraise investments, how to construct a portfolio, and how to avoid common pitfalls.
Where to Start
If you're considering a change, start small. You don't need to overhaul everything at once. Here's a practical first step:
Gather your information. Collect your most recent investment statements and any fee disclosures. Don’t be afraid to request information and ask questions!
Calculate your total costs. Add up all the fees you paid last year as a percentage of your portfolio value, as well as in pounds & pence.
Assess performance. Compare your returns to a relevant benchmark. If you hold a ‘balanced’ portfolio, something like 60% global equities and 40% bonds is often a reasonable comparison.
List your questions. Write down anything about your investments that you don't understand or aren't comfortable with.
Decide on next steps. This might mean having a conversation with your current adviser, exploring alternative platforms, or seeking independent guidance to help you take a more hands-on approach.
The Power of an Informed Decision
Taking control of your investments doesn't mean going it alone. It means making informed decisions based on a clear understanding of your options, your costs, and your goals.
The New Year offers a fresh opportunity to approach your investments with intention rather than inertia. Whether you ultimately decide to stay with your current arrangements, make a change, or take a more active role, the act of conducting a thorough appraisal puts you in a stronger position.
Your investments are working for your future. Make sure you're comfortable with how they're doing so.
Ready to take control? If you'd like independent guidance on understanding and managing your investments, Y Invest can help. We don't manage your money or charge a percentage of your assets. Instead, we give you the tools and support to manage your own investments confidently. Book a free introductory call to learn more.
Disclaimer: This article is for educational purposes only and does not constitute personalised financial advice. Past performance is no guarantee of future results. Consult a professional for advice specific to your circumstances.
