How to Conduct Your Own Portfolio Makeover

Group 1 - The article outlines a structured approach for reviewing investment portfolios, emphasizing the importance of not attempting to complete the review in one session [1] - It suggests gathering all relevant documentation, including investment statements and Social Security information, to assess financial health [1] - A recommended baseline savings rate is 15%, with higher-income individuals encouraged to aim for 20% or more [1] Group 2 - The article highlights the importance of considering other financial goals, such as college funding or home down payments, while ensuring retirement savings are not neglected [2] - For retirees, the viability of the financial plan is gauged by the withdrawal rate, with a 4% guideline suggested as a starting point [2] Group 3 - It advises checking long-term asset allocation to ensure the mix of stocks, bonds, and cash aligns with financial targets, recommending high-quality target-date series for benchmarking [2][3] - Younger investors are encouraged to maintain a stock-heavy portfolio, while those nearing retirement should consider shifting towards bonds and cash [3] Group 4 - The article stresses the importance of maintaining liquid reserves to avoid tapping into investments during financial emergencies, recommending cash reserves of six months to two years of withdrawals for retirees [3][4] - For working individuals, holding three to six months' worth of living expenses in cash is suggested as a good starting point [4] Group 5 - It emphasizes the need to assess suballocations, sector positioning, and specific holdings within the portfolio, noting that market strength has broadened but growth stocks have significantly outperformed value stocks over the past decade [4][5] - The article concludes with a recommendation to identify opportunities to streamline the portfolio for better efficiency [5]