Is Your Portfolio Fit for 2025? 10 Reasons You Need a Portfolio Health Check Now
- Concord Capital Intelligence
- May 22
- 5 min read
A regular health check is essential for every human being. By undergoing routine checks, we can detect and address potential health issues early, allowing for timely treatment and preventing more serious consequences.
In today’s fast-paced financial landscape, keeping a close eye on your investment portfolio has never been more crucial. Regular portfolio health checks help you identify both laggards and top performers, optimise your returns, and make informed decisions about where to add or reduce exposure.
As we move into 2025, shifts in market dynamics, global economies, and investor behavior create both challenges and new possibilities. A portfolio health check isn't just an annual ritual; it is an important strategy that helps ensure your investments stay aligned with your goals and the current financial climate. Here are ten compelling reasons to make a portfolio health check a top priority this year.
1. Adapting to Market Changes
From post-pandemic recovery to inflation spikes and tech disruptions, the market in 2025 is shaped by new realities. What performed well in past years may now carry different risks and returns. Market conditions can change quickly and factors like interest rates, inflation, and global events significantly influence performance.
For instance, in 2023, the Federal Reserve adjusted interest rates by 0.25%, affecting stock prices and investment choices. A portfolio health check empowers investors to respond to these changes proactively. By regularly assessing your assets, you can realign your investments to prevent surprises and reduce potential losses.
2. Your Risk Tolerance May Have Changed
Your tolerance for risk may shift due to personal circumstances such as changes in income, life events, or market experiences. For example, after experiencing a significant market downturn like the one in 2020, many investors became more conservative.
A portfolio health check helps determine if your current investments match your comfort level with risk. This understanding is crucial for making sound investment decisions and can alleviate anxiety during turbulent times.
3. Your Goals May Have Changed
Over time, your financial objectives can change. Whether your focus is on retirement, funding a child's college education, or saving for a new home, a health check is the perfect opportunity to reassess those goals. Research shows that 70% of investors who don't regularly revisit their goals may ultimately misalign their portfolios.
Ensuring your investments reflect your current objectives can keep you on track and motivated. A health check recalibrates your strategy based on where you are now — not where you were five years ago.
4. Capitalising on New Opportunities
The investment world is constantly evolving. With sectors like technology and renewable energy rapidly gaining traction, failing to explore these options could mean missing out on significant returns. For instance, investments in electric vehicle stocks surged by over 180% in 2021. Regular reviews can help you spot trends and diversify your portfolio to include innovative investment opportunities that may not have been on your radar previously.
5. Avoiding Overexposure
Concentrating too much on one asset class or sector can be detrimental. For example, during the pandemic, those heavily invested in travel and hospitality were hit hard. Another example, market rallies may have unintentionally concentrated your holdings in tech or US equities.
A health check can help you identify any overexposure, allowing you to diversify your investments effectively. As a rule, maintaining a balanced portfolio can reduce risk and bolster overall returns.
6. Currency Exposure: The Silent Drag (or Boost) on Your Returns
When investing in international assets — even through global ETFs or mutual funds — you’re not just exposed to the performance of the underlying companies. You’re also exposed to foreign exchange (FX) risk.
With global interest rates, inflation, and geopolitical policies diverging across regions, currencies can fluctuate significantly. You might be 30% exposed to non-USD or non-GBP assets — without realising it. This could mean you’re unintentionally betting on currency movements, which adds risk you’re not being paid to take.
A portfolio health check quantifies your indirect currency exposure — often hidden inside “world” or “emerging market” funds — and highlights how it affects performance and volatility. It can also suggest whether you need currency-hedged options or better regional diversification.
7. Benchmarking Performance
It's important to know how your portfolio is performing compared to the market or specific benchmark. An effective health check includes assessing performance metrics, such as annual returns and volatility. For instance, if your portfolio underperformed the S&P 500 by more than 3% over the past year, it might be time to reevaluate your strategy.
Regular evaluation keeps your portfolio competitive and ensures you’re on the right track. Many investors think they’re “doing well” but don’t compare performance to the right benchmark. A check fixes that.
8. Reinforcing Discipline
Market volatility can trigger emotional reactions that lead to poor investment decisions. Regular portfolio health checks encourage a disciplined approach to investing. They provide a structured framework for decision-making, reducing the temptation to make impulsive moves based on short-term market fluctuations.
Even the smartest investors are prone to behavioral mistakes — overconfidence, fear of loss, confirmation bias, and more. These biases creep into your portfolio through bad timing, chasing trends, or avoiding risk altogether. “If you sold during the 2022 dip or missed the 2023 AI rally, your portfolio might be shaped more by fear than fundamentals. A portfolio review helps course-correct.”
9. Scenario Testing: Is Your Portfolio Built for Extremes?
Markets don’t move in straight lines. A well-constructed portfolio isn’t just designed to perform in normal markets — it should also withstand stress in abnormal ones.
From geopolitical shocks to tech bubbles or energy spikes, portfolios can behave unpredictably under pressure. Scenario testing simulates how your investments would respond under different conditions, such as:
A 20% stock market correction
A rapid interest rate hike
A commodities rally
It helps model the potential impact on your portfolio value, uncovering concentration risks or liquidity issues. It also helps investors plan in advance, so they’re not making emotional decisions during the next market crisis. “What happens if energy prices surge 40%? Or if the S&P 500 drops 15% in a month?” With our solutions, you’ll know — and you’ll know what to do.
10. Preparing for Future Trends
Emerging technologies, changing consumer behaviors, and evolving regulations will continue to shape the investment landscape. A portfolio health check allows you to reassess strategies and adjust to these trends proactively. Staying informed and adaptable is key to achieving long-term success in an unpredictable market.
A Vital Step for Investors in 2025
As we embrace 2025, conducting a portfolio health check should be at the forefront of every investor's strategy. By revisiting your portfolio amidst changing market conditions and personal circumstances, you can secure your financial future. Taking this step can lead to stronger returns, reduced stress, and greater confidence in your investment journey. Make it a priority to assess your portfolio this year; it's a critical move towards taking charge of your financial destiny.
Invest With Confidence, Not Anxiety
Reduce emotional investing and regain clarity with a personalised portfolio health check. Book your 1:1 review with Concord Capital Intelligence today.
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