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Any money you need for short-term expenses or emergencies should stay in your savings account. While you might not earn much interest on that money (especially these days with such low rates), your money is also protected.
This is not necessarily the case when investing in a brokerage account. Since brokerage accounts can lose money or see significant changes in value over time, it is important to track them. If it’s been a year since you opened your brokerage account, here are three essential things to do now.
1. See how your investments have performed overall
Your goal in putting money into a brokerage account is to make money. It is therefore important to evaluate the performance of your investments.
Right now, if you check your wallet balance from a year ago, it might not be up. Indeed, the stock market has spent much of the start of 2022 in correction territory (i.e. a period in which the broader stock market loses 10% or more of its value). But this is not necessarily problematic.
If your investments are moving in line with the broader market, you may not need to make changes to your holdings. But if your portfolio is down much more than the general stock market, it could be a sign that it’s time to redirect some investments or rethink your strategy.
2. Make sure your portfolio is beautiful and diverse
A diversified portfolio could help you minimize losses during periods of stock market volatility and maximize gains when the market is healthier. But it is possible for a portfolio to start out diversified and become less so over time.
The reason? Investment values can change a lot over the course of a year. And the stocks you bought a year ago may have risen or fallen in value to the point where you are now more heavily invested in one sector of the market and less evenly invested in others.
This is why it is important to do a diversification check one year after opening a brokerage account. If you find, for example, that you are now too heavily invested in technology or energy stocks, you can make changes to your holdings for a more even mix.
3. Make sure you haven’t been charged surprise fees
Some brokerage accounts charge fees for things like inactivity or a low balance. These fees are supposed to be disclosed in advance. But maybe you forgot some of them or thought they wouldn’t apply to you.
That’s why it’s a good idea to do a fee check after your brokerage account has been open for a year. If you see unwanted charges, you can investigate and possibly consider moving your money to a new account.
A brokerage account is something you should monitor regularly. Be sure to tick these items off your list if it’s been a year since you opened your account and started investing in it.
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