Editor’s note: Here
are comments about the issues people should consider when reviewing their
investment portfolios. The comments come from Oliver Gregson, who is head of
discretionary portfolio management at Barclays. As ever, while this publication
is delighted to share such points with readers, it stresses that it does not
necessarily endorse all the opinions in the article.

Revisit objectives

With the fast-paced life of today, it is important for
investors to regularly check and validate their overall financial goals to
ensure they reconcile with their current investments. What is the purpose of
the portfolio?  Is it still the same, for
example, to generate income or capital growth? Do they require some of the
capital in the future? Have they recently had a life event – birth, marriage
etc? Is their risk appetite still the same?

Evaluate the
portfolio

Look at overall positioning. Combine all their assets and
liabilities to create a personal balance sheet and investment ledger. Aggregate
to a single view of all investments – many of our clients hold multiple securities
in a variety of accounts (pensions, Self Invested Personal Pensions, Individual
Savings Accounts, etc), what does this all look like together? Then compare
this versus their target asset allocation to enable them to see where they are
over or under exposed.

Value – what asset
classes may provide value in 2013?

Despite 2013 presenting several investment hurdles, the
outlook for equities looks relatively positive. As such we suggest investors
rotate their portfolios away from cash and Gilts towards developed market equities
especially in continental Europe, US and developed Asia.  From a bottom-up perspective, we have identified
the following key themes:

·         Mergers
& Acquisition

·         Eurotrash
and Euro Cash

·         The Bond
Bubble

·         US Industrial
Renaissance

·         The Return
of Real Estate

·         Disruptive
Mobility

Identify any portfolio
changes (can be discussed with a portfolio manager or advisor)

Combine Steps 1,2 and 3 with what the outlook is for 2013 to
see if the investments are positioned correctly. Speak to an expert about some
of the major holdings within the portfolio so it is clear what is going on – do
investors need to sell or switch some holdings? Having pooled an overview of
all the investments, how different does it look to what it should? Any big gaps
are points to discuss and should be used as identifiers/triggers to the next
steps.

Einstein!

Einstein referred to “compounding” as one of the most
powerful forces in the universe. One of the most powerful long-term return
drivers is ensuring you rebalance your portfolio regularly – at a minimum
quarterly.

Work with an advisor
to identify new ideas/take action steps

Bringing all of the above together, investors should use the
large differences from Step 4 above to guide what actions they take and then
ensure these actions fit into their portfolio objectives, the macro environment
(their outlook) and the current portfolio positioning.