May Is a Great Time to Confirm Your Financial Security: Three Pillars of Portfolio Strength

As the days grow longer, May brings more than plans for graduations, weddings, and vacations—it’s also an ideal time to check in on your financial health. Much like we reset our homes and routines, it’s wise to evaluate whether your investment strategy is still aligned with your long-term vision.

At the heart of a strong investment strategy is diversification through asset allocation. And behind every thoughtful allocation are three pillars that help keep your portfolio resilient: Risk Tolerance, Time Horizon and Investment Objectives.

1. Risk Tolerance: What is your comfort level?

Markets naturally fluctuate. If recent market activity has made you uneasy, it might be time to ask yourself: Does my portfolio still reflect my comfort level? For instance, many investors equate a market drop with a bad year, but history tells a different story.

Here’s some perspective to consider:

The chart from Dimensional Fund Advisors highlights annual returns and the steepest declines for each consecutive year, tracking the Russell 3000 Index from 2005 through 2024. Despite sharp intra-year declines—U.S. stocks finished up in 17 of the past 20 years.

Just remember, volatility is normal, and risk tolerance simply reflects how much market fluctuation you are comfortable with.

2. Time Horizon: When Will You Need the Money?

Spring reminds us that life moves in cycles—including our financial lives. Whether you’re saving for a home, college, or retirement, your time horizon affects how your investments should be structured to meet your goals. And remember, the longer your time horizon, the better you may weather short-term volatility.

As you have likely heard before, successful investing is about time in the market, not timing of the market.

3. Investment Objectives: What Are You Working Toward?

Whether your portfolio focus is growth, income, or preservation to secure your financial future, your goals should guide your investment strategy. As we plan for life’s milestones at this time of year, it is a great time to re-confirm that your portfolio aligns with what matters most to you.

Our three pillars show that strong portfolios are built on thoughtful planning, not guesswork. A careful revisiting of your risk tolerance, time horizon, and goals may offer you the clarity and confidence to move forward, no matter what the markets bring.

If you are unsure about where to start, we’re here to help.