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How to Conduct a Mid-Year Portfolio Review: A Checklist for Every Investor
Key takeaways
- A mid-year portfolio review helps detect deviations from the plan before they compound.
- Key questions: does the allocation match the plan, has the life situation changed, what are the costs?
- Rebalancing is most effective when done at fixed intervals, not in reaction to news.
- A review is not a reason for changes — if everything matches the plan, do nothing.
- Document changes and reasons — it will help at the next review.
A mid-year portfolio review is a systematic examination of whether the investment strategy still aligns with your goals, whether the allocation has drifted from the plan, and whether costs are under control — without the need to react to current news.
Why Scheduled Reviews, Not Reactions to News
The biggest enemy of an investor is excess activity. Following news and reacting to every market move statistically leads to worse outcomes than passive holding. A planned review once or twice a year, on the other hand, is a healthy discipline: you assess the situation calmly, free from momentary emotional pressure. January and June are natural dates — they are half a year apart and easy to remember.
Mid-Year Review Checklist
- Plan vs. reality: How far are you from your goal? Are you investing regularly according to plan?
- Asset allocation: Is the ratio of equities, bonds, and cash still in line with the plan? If equities have risen significantly, they may now be overweight.
- Costs: Do you know how much you are paying in total fees (TER, brokerage fees, currency conversion)?
- Life situation: Has something fundamental changed — income, commitments, time horizon, risk tolerance?
- Rebalancing: Is the deviation from the target allocation greater than 5–10 percentage points? If so, consider rebalancing.
- Taxes: Are you approaching the three-year tax test? Are some positions at a gain or loss that will affect your tax situation?
Rebalancing: How and When
Rebalancing means returning the portfolio to its target allocation. Do it if the allocation deviates more than 5 percentage points from the plan. Prioritize rebalancing with incoming investments — cheaper and tax-neutral compared to selling and buying. If incoming investments are insufficient, sell overweight positions with regard to the tax impact.
What to Write Down After the Review
A brief note is enough: the review date, current allocation, changes made, and reasons. At the next review, read this note — you will see how your thinking has evolved and whether the changes were correct. For a broader picture, use the projection calculator to verify that your current investment pace is leading you toward your goal.
FAQ
How often should I review my portfolio?
Once or twice a year is sufficient. January and June are natural dates. More frequent reviews unnecessarily tempt you into excess activity, which statistically reduces returns.
What should I do if the allocation does not match the plan?
It depends on the deviation. If it is less than 5 percentage points, do nothing. Address a larger deviation primarily through incoming investments — buy the underweighted asset classes. Sell only if that is not enough.
Do I need to react to market conditions during a review?
No. The review assesses your plan and allocation, not current news. If the market situation does not change the logic of your strategy, change nothing — sticking to the plan is more valuable than reacting to headlines.
What is the three-year tax test?
A tax advantage in the Czech Republic: if you hold an ETF or equities for more than three years, the gain from the sale is exempt from income tax. During a review it is worth checking which positions are approaching this threshold.