Evaluating Your Investments and Creating a Long-Term Financial Plan

Evaluating Your Investments and Creating a Long-Term Financial Plan


Investing is a crucial component of long-term financial planning. It allows individuals to grow their
wealth and achieve their financial goals over time. As we enter a new year, it is essential to review your
investment strategy, assess your progress, and make any necessary adjustments to stay on track. In this
comprehensive guide, we will explore the key steps involved in evaluating your investments and creating
a long-term financial plan. By following these steps, you can make informed decisions, stay focused on
your goals, and navigate the global market with confidence.

1. Assessing Your Current Investment Portfolio

Before making any changes or setting new investment goals, it is crucial to evaluate your current
portfolio’s performance. This assessment will provide you with valuable insights into your investments’ strengths and weaknesses, allowing you to make informed decisions moving forward.

1.1: Review Your Investment Goal

Start by reviewing your goal, is your current situation aligned with your investment goal? Compare your goal with your risk tolerance by discussing this with your financial advisor, it will help you determine if your goals are meeting your expectations.

1.2: Analyse Asset Allocation

Analyse your asset allocation. Ensure that your investments are appropriately diversified across different asset classes, such as stocks, bonds, and real estate. Diversification helps mitigate risk and maximise potential returns by distributing your investments across various geographical regions and industries.

1.3: Consider Risk Tolerance

Evaluate your risk tolerance and determine if it aligns with your current investment (plan) strategy. If you have experienced a significant life change, it may be necessary to adjust your portfolio accordingly. Private Capital uses your risk tolerance as a discussion point, which provides valuable guidance in evaluating your long-term goals.


2. Setting Long-Term Financial Goals

Creating clear and achievable long-term financial goals is essential for successful investing. By setting
specific objectives, you can develop a roadmap to guide your investment decisions and stay focused on
your desired outcomes. Financial advisors usually discuss your financial goals at a very early stage to
visualise a complete picture of your situation.

2.1: Define Your Financial Goals

Start by defining your financial goals. Are you saving for retirement, purchasing a home, funding your children’s education, or planning for a comfortable future? Clearly articulating your goals will help you align your investment strategy with your aspirations.

2.2: Determine Your Time Horizon

Consider your time horizon for each financial goal. Some goals, like retirement, may have a longer time frame, allowing for more aggressive investment strategies. Shorter-term goals, such as saving for a down payment, may require more conservative investment approaches.

2.3: Consider Cash Flow and Budgeting

Evaluate your cash flow to identify any gaps such as allocating sufficient income to savings. A simple way can be developing a budget that accounts for your income, expenses, and savings contributions. Utilising cash flow modelling can help identify realistic goals. Are you saving enough for your expected retirement expenditure?

Cash flows are very useful as they can take into account inflationary budgeting. Keep yourself accountable for future inflation by making sure you inflation-link your savings contribution with your wage increase and overall global inflation rate


3. Your Investment Strategy

Once you have assessed your current portfolio and established your long-term financial goals, identify a
fiduciary advisor, ask detailed questions and consider working with an advisor such as Private Capital to
develop an investment strategy that aligns with your objectives. This strategy will serve as a roadmap for
your investment decisions and help you stay on track.

3.1: Stay the course and Block Out the Noise

Once you have established your investment strategy, it is crucial to stay the course and tune out the
noise from short-term media outlets. The global market can be volatile, but keeping a long-term
perspective helps you avoid making impulsive decisions based on short-term market movements. Focus on your goals and trust in your investment strategy.


4. Monitor Your Investment Plan

Regularly monitoring your progress doesn’t mean every day. Your goals may change which might need
a change in asset allocation through your risk tolerance. This ongoing monitoring allows you to make
necessary adjustments and ensure that your investments align with your long-term goals.

4.1: Rebalancing Your Portfolio

Regularly review your portfolio to ensure it remains aligned with your investment strategy. Market
fluctuations may cause your asset allocation to drift from your desired targets. Discretionary financial
planners can rebalance your portfolio periodically by buying or selling assets to bring it back in line with your desired allocation. The benefits of rebalancing are crucial to meeting your goals. More information on how beneficial rebalancing is can be found here.

4.2: Seek Professional Advice

Consider working with a financial advisor like Private Capital to guide you through the implementation and monitoring process. A qualified reputable financial advisor can provide valuable insights, help you navigate market volatility, and make informed decisions based on your goals and risk tolerance.

4.3: Schedule Annual Plan Reviews

Schedule annual reviews of your financial plan to assess your progress, adjust goals if necessary, and
identify any changes in your risk tolerance. These reviews provide an opportunity to ensure that your
financial plan remains aligned with your evolving circumstances and aspirations.



Investing is a critical component of long-term financial planning. By evaluating your investments, setting
clear goals, developing an investment strategy, and monitoring your progress, you can stay on track to
achieve your financial aspirations.

As financial planners, we encourage you to schedule regular reviews of your current situation, goals, and
risk tolerance. Through cash flow forecasting, we can help you identify surplus cash from bonuses or
surplus income that can be put towards your financial plan and investment strategy. At the start of every
year, we look at all client portfolios review their asset allocation and determine whether a rebalance
is necessary. Contact us to learn how we use lifetime cash flow forecasting to help our clients
achieve their goals.