9 Key Signs It Is Time To Shift Your Investing Strategy in 2025

Jordan Rosenfeld

Sun, Dec 1, 2024, 9:00 AM 5 min read

If you set investing goals some time ago and haven’t looked at them since it’s probably time to take another look. The new year can also be a great time to revise and set financial priorities.

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Financial goals evolve depending on your stage of life. Whether you’re planning for retirement, saving for a home, or funding a child’s education, it may be time to adjust your investment strategy accordingly.

Every investing goal is unique and may require a different risk tolerance, time horizon, and investment approach. Experts explain the key signs you need to shift your investing goals.

Significant Changes in Market Conditions

Things like rising interest rates, inflation, or shifts in economic indicators, can affect asset performance, according to Christopher Stroup, CFP and founder of Silicon Beach Financial.

“If you notice certain sectors are underperforming or that economic forecasts suggest a potential downturn, it may be wise to diversify your portfolio or reallocate assets to mitigate risks,” he said.

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Your Assets Are Underperforming

Another area that may necessitate a shift is if you find that your assets are consistently underperforming compared to market benchmarks or similar assets, Stroup said. “Holding onto poorly performing assets in hopes of a rebound can be detrimental to your overall portfolio,” he said.

He advised it’s important to regularly review investment performance to help you identify trends and make necessary adjustments.

If Your Tax Bill Is Too High

If you’re finding that you owe more money at tax time than you’d like, according to

Nathan Hoyt, the chief investment officer for Regent Peak Wealth Advisors, it may be time to shift your investments into tax-advantaged accounts, he said.

Additionally, he said, “Are you generating short-term capital gains that are taxed at ordinary rates? You may just want to rethink the location as well as the allocation in that instance.”

If There’s Nothing Disappointing in Your Portfolio

Hoyt’s next bit of advice is what he calls “counterintuitive” but from an investing strategy, it makes sense. “If there’s nothing in your portfolio that’s disappointing, then you need to shift because you’re not properly diversified,” he said.

In other words, you may be too heavily invested in one asset class type, which may be working for you now, but over time will probably disappoint you because everything that rises must eventually fall.

If You Don’t Know What Fees You’re Incurring

If you don’t know what or how many fees you’re being charged on your accounts or by your financial managers, then chances are you also don’t know what value you’re getting from that investment manager or firm, Hoyt said.

“One example I see is when people mix insurance and investments. There’s nothing inherently wrong with that, but it could be a very expensive proposition and it may not be accomplishing the goals that you may have set out to accomplish with that particular strategy.”

If Your Objectives or Risk Profile Have Changed

A common reason to shift strategy is simply that your financial objectives have changed, Hoyt pointed out. “So maybe you lose your job, you have a health change, or there’s the birth of a new baby. There’s any number of life circumstances that would change your investing objective.”

If your objectives as an investor have changed, your goals have changed, or your situation or circumstances have changed, he urged, “Go revisit your investments because your risk profile may have changed as well.”

If You Want To Jump On a New Investment Type

Investing is a changeable area of finance because new types of investments arise over time, such as companies developing electric cars and artificial intelligence, which he called “secular shifts.” If you want to jump on a new investment trend, then that may require rethinking your investing strategy to free up funds.

If Your Wealth Has Grown Difficult To Manage

In the category of problems most people would like to have, is that a key sign to shift your investment strategy is if your wealth has grown too big or too sizable to handle alone, Hoyt said.

For example, he pointed out, say a person with a $1 million portfolio makes some kind of mistake, such as putting assets in the wrong type of account, panic selling or not adjusting an investment strategy and you lose say 4% to 6% in said move. That’s not such a drastic loss as someone who makes the same error in a $10 million portfolio.

In such a situation, it would be wise to revisit how you’re managing such wealth.

If Your Financial Advisor Is Golfing Too Much

Lastly, Hoyt offered a “tongue-in-cheek” sign that nonetheless has real implications. “If you already work with an advisor and they spend too much time golfing, you should think about making a change,” he said.

In other words, your advisor should be working for you, should be trustworthy and you should be able to see that by the way your assets grow.

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