Step 1: List every holding
Gather all accounts, including retirement accounts, and write down each holding and its current value. Funds count as many holdings, so look up what is inside them.
Step 2: Check your allocation
Calculate what percentage sits in stocks, bonds, cash and other assets. This single split explains most of how a portfolio behaves over time.
Step 3: Look for concentration
Is any single company more than about 5–10% of the total? Is one sector dominant? Do your funds overlap heavily? Concentration can boost returns but also magnifies losses.
Step 4: Review costs
Check expense ratios and account fees. A difference of 0.5% a year may look small, but it compounds over decades.
Step 5: Stress-test it
Ask how much the portfolio might have fallen in past crashes and how long it took to recover. If that drop would push you to sell, the portfolio may carry more risk than you can hold.
Step 6: Compare with your goals
Money needed in two years and money for retirement in thirty usually deserve different mixes. Revisit the analysis periodically or after major life changes.
Key takeaways
- Start with a complete list, then look at allocation.
- Check concentration, overlap and fees.
- Stress-test against history and compare with your time horizon.