3 Powerful Reasons To Seek Investment Portfolio Valuation Services

Posted on: 7 April 2022

Every investor needs to know the value of their portfolio, which can fluctuate. Routine investment portfolio valuation services are a good way to know if there are concerns and adjustments that need to be made. There are a variety of assets that can be listed in a portfolio. The following points identify a few reasons for investors to seek another point of view about their portfolios rather than assuming that they are solid. 

Understand Risk Levels

Every investor has risks that they should be concerned about. However, some portfolios have a higher risk than others. There are individual assets that carry their own level of risks. Many individuals view certain stocks as stable. This can lead to a false sense of security. Financial advisors can help investors to identify their most volatile assets such as stocks. It may seem that liquid assets such as cash and gold are protected against a portfolio that loses value from a high-risk investment that fails. However, it is possible for losses to cause an investor to need to rely on their liquid assets to replace the lost value.

Find Opportunities to Diversify

Most investors agree that a diversified portfolio is important. However, some may choose to stay in their comfort zone if their portfolios appear to be performing well. This can lead to a portfolio that becomes unbalanced. Routine checks need to be made to ensure that valuation does not greatly differ from what the investor expects. Although values fluctuate, continued declines even on a small scale could be signs of trouble. On a grander scale, it could result in significant losses in a short period of time. Keeping a close check on the investment portfolio valuation can lead to recognizing when it is time to liquidate assets that are causing the portfolio to lose value. 

Identify Rebalance Options

Portfolio rebalancing should be routinely done. It involves liquidating some assets in the portfolio and buying new ones. It is a process that can be tricky because some investors have a hard time identifying which assets to liquidate. An asset that is stable this year might have issues in the future. Therefore, trusting in one stock or another asset should be a cautious move. Rebalancing may involve selling portions of an asset rather than all of it. This aids in ensuring diversification and avoiding a potential total loss on certain investments.

Investment portfolio valuation services can be used as a resource to identify risks, actual value, potential value, and opportunities to grow. Risk tolerance varies depending on the personal style of the investor. Approaches to building and rebalancing portfolios can vary too.

For more information, contact a local company, like Marshall & Stevens.