Does your portfolio need a review? How to give yours a spring clean
The start of the new financial year is a good time to look into your investments.
Spring and the start of the new tax year from 6 April provides a natural moment to reset and revisit your investment portfolio to make sure you're on track for your investing goals. It can seem like a daunting task, but don’t worry: we’ll set out the steps to get started.
Before attention turns to the summer months, it is worth taking the opportunity to review your investments, free from the pressures of the tax year end deadline.
What’s more, with the UK economy facing multiple challenges such as a higher outlook for inflation, potentially rising interest rates and a property market slump, it’s never been more important to make sure your money’s working as hard as possible.
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1. Know your goals
Before you do anything it’s a good idea to sit down and think about what you want to get from your investments.
Are you pension saving for retirement? To buy a home? Whatever your goals are, long or short-term, it’s a good idea to be clear as this can affect your investing decisions.
“Investing without setting a goal is like going for a drive without a destination in mind,” says Laura Suter, director of personal finance at AJ Bell. “When you have an objective it’s easier to figure out how much risk you can take and which assets might be suitable.”
2. Make sure your investments are still right for you
Once you know what your goals are, it’s time to re-evaluate your portfolio. If your goals have changed, do your investments still make sense from a risk perspective?
For example, if your time horizon has decreased – maybe you’re now much closer to retirement – you may want to reconsider the suitability of any very high risk investments you may have and look to invest elsewhere that is lower risk. Those approaching retirement often start reducing their investments in stocks and move more of their money into bonds to address the risk question in their portfolios.
Equally, if you’re in a position to take more risk – maybe you have decided to retire later or only partially retire while you continue part-time work – you could reassess to make sure your portfolio fits with your investment goals, especially if these have changed since you started investing.
3. Rebalance your portfolio
Now that you’ve covered the basics, and have decided whether your investments still align with your goals, it’s time to rebalance your portfolio.
“Rebalancing your investments every year or so is also important to make sure you don’t end up with an unbalanced portfolio,” says Suter. “If some investments have done particularly well in the past year and others have fallen, your portfolio will be skewed towards those outperformers.”
Think about how you want your investments split and see how your portfolio has deviated from that over the last year. If it has skewed more towards one of them, you might want to sell a portion to return to your desired balance.
“While it can feel counterintuitive to sell the stocks that have risen and buy more of the ones that have fallen, that’s the theory you should be sticking to,” says Suter.
In this same vein, one of the most important aspects of an investment portfolio spring clean is diversification.
Corinne Lord, senior investment specialist at St. James’s Place, said: “Prolonged outperformance in specific areas of the market can lead to portfolios becoming unintentionally over-exposed to certain regions or sectors, particularly when a small number of companies or markets have driven a large share of returns.
“While this can feel positive in the short term, it can increase risk if market leadership begins to shift. A well-diversified portfolio helps spread risk more effectively and reduces reliance on any single area of the market.
“Taking the time to review where your investments are concentrated, and whether that still reflects your intended strategy, is a key step in maintaining a resilient portfolio.”
4. Check your investment’s performance in the portfolio review
That brings us to our fourth consideration – checking on how your investments have been doing.
If you’re going to sell part of the investments that have outperformed to rebalance your portfolio, you also need to look at the ones that have underperformed – and why. This is the case even if you only invest in funds and not individual stocks.
Market movements, geopolitical events and periods of volatility can create uncertainty, but reacting too quickly to short-term developments can often do more harm than good.
Lord from St James’s Place said: “We consistently see that investors who remain focused on their long-term objectives, rather than trying to respond to every market movement, are better placed to achieve more stable outcomes over time. Maintaining discipline, particularly during periods of uncertainty, is one of the most important factors in successful investing.”
While resisting the temptation to sell low, it is worth considering why any given fund has fallen, and whether you expect it to recover in the timeframe you're investing for.
5. Make sure you’re making the most out of your allowances
There are changes to income tax, capital gains tax and dividend allowance coming into effect from April when the new financial year starts. We outline all of these in our article: New tax year changes: how much do you have to pay in 2026/27?
At the start of the new tax year, it’s important to make sure you make use of the current allowances.
This could include reviewing and doing some early-bird shopping for your ISA or transferring your current assets via a Bed and ISA.
Investing £10,000 on the first day of the tax year for the last 10 years would have seen a stocks and shares ISA grow to £132,068, according to calculations by Hargreaves Lansdown, assuming 5% investment growth each year, without factoring in investment charges or inflation.
Shifting investments into an ISA protects future gains and dividends from the clutches of tax. It also means that you will no longer have to declare them on your self-assessment tax return.
6. Look at your investment platform fees
Investment platforms charge a percentage or flat fees. Some are more costly than others, and this could be eating into your returns.
Check that the fees you’re paying make sense for the investments you hold.
If you have a larger portfolio, you will be paying a larger percentage fee.
But fees shouldn't be the only thing you consider when looking for an investment platform. Make sure the investment options and the services they offer are right for you.
