A good investment plan is designed to work over years, not days. Yet the temptation to tinker is constant. Markets move, news breaks, and the plan that felt right six months ago can suddenly feel inadequate.
Knowing when to review your plan is as important as having one. Review too often, and you introduce the noise and reactivity that the plan was meant to prevent. Review too rarely, and you miss genuine signals that circumstances have changed.
This article outlines the triggers that warrant a plan review and the triggers that do not. The goal is to establish a cadence that keeps your strategy aligned with your life while protecting it from the short-term turbulence that rarely matters.
This is general educational information, not personal financial advice.
The Problem with Constant Review#
Reviewing your investment plan sounds prudent. How could more attention be harmful?
The answer lies in what frequent review actually produces: more decisions. Each review is an opportunity to change something. Each change carries costs (transaction fees, taxes, time) and risks (selling at the wrong moment, buying into a trend too late, abandoning a strategy before it has time to work).
Research on investor behaviour shows that more active investors tend to underperform less active ones.¹ The pattern is consistent across studies: the more often people trade, the worse their outcomes. Part of this is fees and taxes, but a larger part is behavioural. Frequent engagement leads to overreaction, trend-chasing, and abandonment of long-term strategies.
A plan that is reviewed weekly is not a long-term plan. It is a series of short-term decisions dressed up as strategy.
The goal is not to ignore your investments. It is to match the frequency of review to the time horizon of the goals. If the goal is 20 years away, reviewing the plan quarterly or annually is sufficient. Daily or weekly review introduces friction without adding value.
Triggers That Warrant a Review#
Some changes in circumstances genuinely require revisiting your investment plan. These are not reactions to market movements. They are responses to shifts in your own life.
1. Major Life Events#
Significant life changes often alter the assumptions underlying an investment strategy.
Examples:
- Marriage or divorce
- Birth or adoption of a child
- Death of a spouse or dependant
- Receiving an inheritance or windfall
- Major illness or disability
- Caring responsibilities for a family member
Each of these events can affect time horizon, risk capacity, income, expenses, or goals. A plan designed for a single person with no dependants may not be appropriate for a parent with three children. A plan designed for dual income may not survive a divorce.
Life events do not require immediate action, but they do require review. The question is whether the existing plan still fits the new circumstances.
2. Changes in Time Horizon#
If the date when you need the money has changed, the plan may need adjustment.
Examples:
- Retirement is now five years away instead of fifteen.
- A house purchase is now planned for next year instead of five years from now.
- A child's education expenses are approaching.
- A goal has been achieved or abandoned.
Time horizon is one of the primary determinants of appropriate asset allocation. A portfolio designed for a 20-year horizon has different characteristics than one designed for a 3-year horizon. When the horizon shifts, the portfolio may need to shift as well.
3. Changes in Income or Cashflow#
Sustained changes to income affect both the ability to contribute and the capacity to withstand losses.
Examples:
- Job loss or significant pay reduction
- Promotion or substantial pay increase
- Transition to part-time work or self-employment
- New recurring expenses (mortgage, school fees, medical costs)
- Windfall income (bonus, sale of asset, inheritance)
A plan built around contributing $1,000 per month may not work if income drops by 40%. Conversely, a significant income increase might allow for higher contributions or a reassessment of goals.
Risk capacity is closely tied to income stability. A secure government job provides different capacity than freelance work with variable earnings. If the stability of income changes, the risk profile of the portfolio may need to change too.
4. Changes in Risk Capacity or Tolerance#
Risk tolerance (how much volatility you can emotionally handle) and risk capacity (how much you can financially afford to lose) can both change over time.
Capacity changes:
- Approaching retirement reduces capacity because there is less time to recover from losses.
- Accumulating significant assets outside investments (e.g., paid-off home) may increase capacity.
- Taking on significant debt reduces capacity.
Tolerance changes:
- Experiencing a major downturn may reveal that your tolerance is lower than you thought.
- Successfully navigating volatility may increase comfort with risk.
- Life events (health scares, job loss) can shift emotional baselines.
If your experience of a market decline was significantly more stressful than expected, that is information worth incorporating into your plan. A portfolio that keeps you awake at night is not appropriate, regardless of what the theory says.
5. Reaching a Goal Milestone#
When a goal is achieved or abandoned, the plan needs to reflect that.
Examples:
- The house deposit has been saved; the money can now be allocated to longer-term goals.
- A child has finished education; the education fund is no longer needed.
- A goal has been reassessed as no longer relevant (e.g., cancelling a planned renovation).
Goals drive asset allocation. When goals change, the buckets that serve them may need reallocation.
Triggers That Do Not Warrant a Review#
Many events that feel significant are not, in the context of a long-term investment plan. Learning to distinguish signal from noise is a core skill for staying the course.
Market Movements#
A market decline of 10%, 20%, or even 30% is not, by itself, a reason to review your plan.
Markets fall. This is expected. A well-designed plan already accounts for the possibility of significant declines. The plan was built with the understanding that volatility is part of the journey.
If a 20% decline makes you want to change your plan, the issue is not the decline. It is that the plan may not have been appropriate for your risk tolerance in the first place. That is worth understanding, but the middle of a downturn is not the time to make structural changes.
The exception is if a decline coincides with a genuine life change (job loss, approaching goal date). In that case, it is the life change that triggers the review, not the market movement.
News Headlines#
Headlines are designed to capture attention, not to inform long-term investment decisions.
A single news event (political, economic, or geopolitical) is almost never a sufficient reason to change an investment strategy. Markets process news quickly. By the time you read a headline, prices have already adjusted.
More importantly, the relationship between news and market outcomes is unpredictable. The same type of event can produce opposite market reactions depending on context, timing, and expectations. Trying to adjust a portfolio based on headlines is a form of market timing, and market timing does not work reliably.²
What Others Are Doing#
The fact that colleagues, friends, or online commentators are making changes is not a reason to review your plan.
Social proof is a powerful behavioural driver, but it is a poor investment guide. Other people have different circumstances, time horizons, goals, and risk tolerances. What is appropriate for them may not be appropriate for you.
During market extremes (both highs and lows), social pressure intensifies. Everyone seems to be buying at the top; everyone seems to be selling at the bottom. This is precisely when following others produces the worst outcomes.
Short-Term Performance#
A fund or asset class underperforming for a year or two is not, by itself, a reason to change course.
Investment strategies go through cycles. An approach that underperforms for several years may outperform over the next decade. Conversely, recent outperformers often revert to the mean. Chasing short-term performance is a well-documented path to poor outcomes.³
The question is whether the underlying rationale for the investment has changed, not whether recent returns have been disappointing.
Boredom or Restlessness#
Sometimes the urge to review comes not from any external event, but from internal restlessness. The plan feels stale. The desire to "do something" builds.
This is normal, but it is not a valid trigger for action. A good investment plan is meant to be boring. Excitement in investing usually indicates either excessive risk or excessive activity, both of which tend to reduce outcomes.
If boredom is driving the urge to review, the response is to find engagement elsewhere, not to tinker with a plan that is working as intended.
Establishing a Review Cadence#
Rather than reviewing in response to events, establish a regular schedule. This provides structure while limiting the opportunity for reactive decisions.
Annual review. Once per year, conduct a thorough review of your investment plan. Assess whether your goals, time horizon, income, and risk profile have changed. Check asset allocation and rebalance if needed. Update written rules if circumstances warrant.
Quarterly check-in (optional). A lighter check every three months can confirm that contributions are on track, no major life changes have occurred, and no administrative issues need attention. This is not a strategic review; it is a maintenance check.
Life event trigger. Outside the regular schedule, review only when a genuine life event (as defined above) occurs. Market movements, news, and performance do not qualify.
The cadence should be written into your investment rules. "I will review my plan annually in [month]" creates a commitment that makes unscheduled reviews feel like exceptions rather than norms.
The Cost of Not Reviewing#
While this article emphasises the dangers of over-review, under-review carries its own risks.
An investment plan created at age 30 may not be appropriate at age 50. A strategy designed for wealth accumulation may not serve wealth preservation. Failing to adapt to genuine changes in circumstances can result in a portfolio that no longer serves its purpose.
The balance is to review when your life changes, not when markets change. Life changes are infrequent. Market changes are constant. Matching your review frequency to life, not markets, keeps the plan aligned without introducing noise.
Summary#
Frequent plan review introduces noise, reactivity, and unnecessary decisions, all of which tend to reduce long-term outcomes. Triggers that warrant a genuine review include major life events, changes in time horizon, changes in income or cashflow, changes in risk capacity or tolerance, and reaching goal milestones. Triggers that do not warrant review include market movements, news headlines, what others are doing, short-term performance, and boredom. Establishing a regular review cadence (annually, with quarterly maintenance checks if desired) provides structure while limiting reactive behaviour. The goal is to align the plan with life changes, not market changes, because life changes are meaningful and market changes are mostly noise.
Sources#
- Barber, B. M., & Odean, T. (2000). Trading is hazardous to your wealth: The common stock investment performance of individual investors. The Journal of Finance, 55(2), 773-806. https://doi.org/10.1111/0022-1082.00226
- Sharpe, W. F. (1975). Likely gains from market timing. Financial Analysts Journal, 31(2), 60-69. https://doi.org/10.2469/faj.v31.n2.60
- Vanguard. (2023). The case for low-cost index fund investing. https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/case-for-low-cost-index-fund-investing.html