Investment Strategy: Where You Are Now vs. Where You're Headed

Whitener Capital Management |


Investment Strategy: Where You Are Now Vs. Where You Are Headed   

From CEOs to athletes, most people striving for a certain level of performance are constantly assessing where they are and where they want to be. Regularly checking in helps them decide if they’re effectively using all their resources. Sure, it may seem OK to overshoot a goal, but if resources are used in the wrong way – too inefficient, too costly, not the right kind of risk – it may undermine the long-term prospects of achieving it. And you want to avoid undershooting a goal because it may cause more problems.

A gap analysis can give you a snapshot of your current situation and help you decide the adjustments you’d like to make to get back on track.

Determine Where You’re Headed

For a long-term strategy to have the most potential for success, it should be based on an assessment of your needs, priorities, preferences, and risk tolerance. Financial goals, like planning for lifetime income in retirement, should account for your actual needs, economic factors, and life’s uncertainties. When you put these factors together, you should end up with a target to aim for.

Are You Where You Want to Be?

When you first create your investment strategy, it should be adjusted to your needs. But over time, things will change. For example, a change in the market may shift your allocation of assets out of balance, potentially causing a mismatch of risk and return orientation. A change in priorities may mean you’re assuming too much or too little risk, throwing you off target. While this can be addressed through regular portfolio rebalancing, a gap analysis is another way to see if your portfolio is still leading you toward your goals.

Portfolio gap analysis helps you determine if the resources you’re using to pursue your investment goals are being used effectively across your strategy. When performing your analysis, you may want to consider:


This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.