The End of Year Investment Checklist: Preparing Your Investment Portfolio for 2025

As we approach the end of 2024, it is important to pause and reflect on the performance of your investments over the past year. Now is the time to reassess how your portfolio aligns with your long-term financial goals and to prepare for what lies ahead in 2025. 

The final months of the year are often filled with activity, but taking the time to review your investment strategy now can help you avoid unnecessary stress and set yourself up for success in the new year.

Whether you are an investor with years of experience or just beginning to build your portfolio, a year-end review is essential for staying on track. It is easy to get caught up in the day-to-day fluctuations of the market or make reactive decisions based on short-term changes, but a thorough and intentional review helps your investments to stay still in line with your objectives and risk tolerance.

Let’s dive in.

Preparing Your Investment Portfolio for 2025

1. Review Your Investment Goals

Revisit your investment goals to ensure your portfolio aligns with your changing financial priorities. 

Ask yourself:

Have your goals changed since 2024? Life events like raises, debt payoff, or other changes may mean your goals need adjustment.

Are you on track to meet long-term goals? Check if you're on track to meet milestones like retirement, buying a home, or funding education. If your investments aren’t aligned, consider rebalancing your portfolio.

Should you adjust your risk tolerance? Life changes, such as a new job or expanding family, can affect your risk tolerance. Review whether you should adjust your investments to reflect your current financial situation and future plans.

2. Assess Portfolio Diversification

Diversification is essential for managing risk. Review your portfolio to ensure it's well spread across asset classes, sectors, and regions. 

Consider the following:

Sector Concentration: 

Are you too heavily invested in one sector, like technology or energy? Over-concentration can increase risk. Diversify across sectors to reduce potential losses from downturns in any one area.

Growth vs. Defensive Assets: 

Is your portfolio balanced between growth (stocks) and defensive assets (bonds or dividend-paying stocks)? Adjust based on the economic outlook—growth assets may perform well in a strong economy, while defensive assets can offer stability during downturns.

Regularly reassessing diversification helps minimize risk and optimize returns across market conditions.

3. Evaluate Tax Efficiency

Tax planning is an essential part of optimizing your investment strategy, particularly at year-end. 

Here’s how you can improve tax efficiency:

Tax-Loss Harvesting: Sell investments that have underperformed to realize losses, which can offset taxable gains from other investments. This can lower your overall tax liability for the year.

Tax-Advantaged Accounts: Max out contributions to tax-deferred accounts like IRAs, 401(k)s, and HSAs. This can reduce your taxable income and increase savings for retirement or healthcare.

Capital Gains: Review your realized gains and losses to make adjustments before year-end. This helps ensure you're in the best possible position to minimize capital gains taxes and optimize your tax situation.

4. Stay Informed About Economic Changes

In 2025, the economic landscape may present both new opportunities and risks that could impact your investment strategy. Staying informed about these changes is essential, but as a business owner or busy professional, you may not have the time or resources to keep up with the latest developments. That’s where a wealth advisor can make a significant difference. By partnering with an advisor, you can stay focused on running your business while they track economic shifts on your behalf and make recommendations to protect and grow your wealth. 

Key areas to monitor include:

Interest Rate Changes: Central bank interest rate decisions impact asset classes like bonds, stocks, and real estate. Higher rates can slow economic activity and make borrowing costlier. A wealth advisor can help adjust your portfolio to manage risks or capitalize on opportunities.

Inflation and Economic Growth: Inflation and economic growth directly affect investment returns. High inflation reduces purchasing power, while growth can raise asset prices. Your wealth advisor can adapt your strategy to navigate these changes, ensuring your portfolio remains aligned with evolving market conditions.

With the right guidance, your financial strategy remains adaptive and well-positioned for any economic changes in 2025. This frees up your time and energy to concentrate on your business and other important priorities, knowing that your wealth is in capable hands.

Preparing Your Investment Portfolio for 2025 with PCWA

At Park City Wealth Advisors, we specialize in creating tailored investment strategies that align with your unique goals and circumstances. If you are ready to take control of your financial future, schedule a meeting with us today. For new clients, we offer a complimentary consultation and will work to create a personalized end-of-year investment checklist designed to optimize your portfolio and prepare for 2025. 

Let us help you focus on what matters most—while we handle the complexities of your financial planning.