Quarterly reviews of stock and other investment performance are abundant these days.  Business newspapers such as The New York Times and Wall Street Journal run quarterly rankings of performance against which investors can compare their holdings. While there’s nothing wrong with this approach to determining how your portfolio stacks up, we have a few other suggestions that should be part of any investor’s regular portfolio maintenance.

Assuming you have a system for tracking your portfolio, start by taking a look at performance for the most recent quarter. How did your stocks compare to the Dow Jones Industrial Average or S&P 500? If you are heavily weighted in mid-cap stocks traded on the Nasdaq, compare your portfolio’s performance to the Nasdaq or Russell 2000 indexes. Note, though, that quarterly performance analysis is only one part of an overall assessment. Don’t get overly excited when one of your holdings turned in a great quarter – you should take a longer look, especially if your goal is to build a long-term investment portfolio for you and your family.

Any good system for portfolio maintenance should include a number of different measures that track different time periods – one quarter, six months, one year, three years, and even five years or more, depending upon your goals. You should use all available tools in conducting your portfolio maintenance. Several websites provide stock charts that enable you to measure the performance of an individual stock with various averages over selected time periods.

Next come some tougher decisions – when to sell, when to buy and when to hold. Research and analysis are critical before you make any decisions about buying or selling a particular holding.

A good starting point is to see what analysts are saying about a particular stock. Take a look at how the company’s competitors have performed: if you find a stock’s share price has under-performed compared to its competitors, you might be on to something. That said, try to determine why your “target” has performed poorly. Are the reasons correctable, or do they reflect longer-term, structural issues?

The key to generating healthy returns is knowing what you have in your portfolio, how much you paid, how your holdings have performed and how this performance stacks up against various averages.

Article provided by Rebecca Ross, Vice President and Financial Advisor at Robert W. Baird & Co., member SIPC. She has 32 years of financial services industry experience, and can be reached at 239-541-9090 or rross@rwbaird.com.