Reassessing: am I investing in the right way?

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The goal for any self investor is to build a strong portfolio and see their money grow as much as possible.

The first step in making sure you're investing in the right way is to choose your funds carefully, bearing in mind your future goals and preferred level of risk. AXA Self Investor has a full range of funds to choose from, as well as ways to narrow down your options to help you create your own portfolio without giving you personal financial advice.

It's also important to review your investment portfolio regularly to make sure it's still right for you. There are a number of things that could impact your investment, and keeping a close eye on your funds could help you decide when it's time for a change.

What makes a diverse portfolio?

If you're new to self investing, you may be more comfortable starting out with only one fund. However, you'll often hear that you should have a range of assets that cover a variety of sectors – rather than putting all your faith in one sector or a couple of funds – so you may aim to build a more diverse portfolio as your confidence increases. The idea behind this is that, by spreading your money, you're less likely to lose it all in one or two poor investments. Other things you might want to consider are your long-term goals, and what kind of investments best suit your needs and complement the other funds in your portfolio.

How do you choose the right funds?

You might be unhappy with the way your investments are performing, or, if they're doing well, you might be wondering whether other investments might be performing better. If you're looking at changing some of your funds, it's important to choose them carefully, and also consider them against the other funds in your portfolio. AXA Self Investor has a range of funds you can explore, so if there's a particular fund you're interested in, you can look through the full range to find the one you want. Alternatively, if you're not sure what funds to choose, AXA's investment experts, Architas, have provided some examples to help you get started with a stocks and shares ISA. These include ready-made funds managed to different risk levels, their top 100 and example portfolios.

How often should you review your portfolio?

It's important to know when to review your investment portfolio to make sure you're getting the most out of what you put in, and see where you could make any changes. How often you should review depends on your circumstances and portfolio, but you should check in on how your funds are doing at least once a year. If your funds aren't performing as well as you'd like, you can assess whether it's time to sell a particular fund or hold on and wait to see if it'll recover. Alternatively, perhaps there are other funds you'd like to invest in to keep your portfolio balanced.

Why review your portfolio?

There are many circumstances that can affect your investment goals. Perhaps you've recently changed job, or maybe you're thinking about starting a family and would like to embark on a longer term investment. As your circumstances change, your attitude to risk may alter too, and the funds you invest in should have a level of risk that you're comfortable with.

Reassessing isn't always about whether your circumstances have changed, though. If your funds aren't providing the return you would like, it might be time to sift through your portfolio and see what changes need to be made. If your funds see a dip, it might be tempting to sell them, but, in some cases, it's worth waiting it out. Remember that investments should be considered for the medium to long term – a low fund price may be down to a short-term dip, and often choosing to wait can see them recover in value.

How do you know when it's time to sell?

Knowing when to sell is an important part of successful investing. The decision can be a tough one, though. Getting out when the prices rise means you won't benefit from potential further increases; selling a fund that has performed poorly means admitting you've made a mistake. Be sure to manage your expectations, though, as funds take time to mature. On the other hand, there are plenty of reasons you might choose to sell, such as a better opportunity.

For more information on self investing in a stocks and shares ISA and working out whether it could be right for you, visit the AXA Self Investor site.

AXA Self Investor does not give advice based on personal circumstances. Using our service means you are responsible for deciding which investments are suitable for you. Personal advice is only available from a financial adviser – if you don't have one, you can find one at unbiased.co.uk.

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