Once you’ve developed an investment strategy and selected the appropriate holdings for each of your goals, it’s important to leave your overall plan in place. However, changes in the financial markets and your time horizon may shift your investment mix from what you originally established. So review your plan periodically and rebalance and reallocate your investments accordingly. Although people may know that making certain changes to their portfolios might potentially improve their financial standing, they may be weary of making decisions they might regret or could be viewed as mistakes by others.

People may also become fixated on a number. For example, lets say you pay $80 a share for an investment, which then drops to $40. You might keep holding, regardless of its prospects, in hopes that it will recover to $80 before you sell. The price of the investment when you bought it shouldn’t be the only factor influencing your decision to sell. that number doesn’t necessarily determine how the holding is performing overall or how it might do in the future.

Over the years, your original portfolio should be modified to reflect your changing time horizon. For example, a prolonged bull market could raise your portfolio’s exposure to stocks. This may increase your risk for potential losses. Rebalancing you portfolio can reduce this exposure. As your time horizon becomes shorter, a high allocation to lower risk investments can help reduce the overall risk of your portfolio.

Review your portfolio at least once a year. Make any adjustments to take into account changes in your time horizon, family circumstance, income, and goals.