6 Key Signs You Need Help With Your Investment Strategy

Investing is one of the keys to building wealth, but every dollar you invest is one that you risk losing — and strategies matter. From growth or value stocks to dividend income or real estate appreciation, your approach and choices will determine whether you succeed or fail over time.

One of the biggest roadblocks is a lack of self-awareness. If you’re overconfident, you might be reluctant to change your strategy even in the face of warning signs that say it’s time to adjust.

GOBankingRates spoke to investing experts who have seen people ignore these signs at their own peril. If any of the following apply to you, do your financial future a favor and get help in building a winning strategy.

Anyone with just a few dollars and zero investing experience can match the market’s average performance with an S&P 500 index fund, which mirrors the stock market’s benchmark index. If you’re not doing at least as well as the greenest novice investor on a budget buying fractional shares of a single ETF, it’s time to adjust.

“One red flag is the inability to outperform the market despite your best efforts,” said Kevin Huffman, veteran day trader, market analyst and owner of Kriminil Trading. “It is a clear sign that your portfolio strategy needs a refreshment to better align with your stated objective and risk tolerance.”

Garrett Smith, a veteran financial advisor and CCO at Ascend Investment Partners, agrees. “While all investments can have short-term fluctuations, persistent lagging behind similar investment vehicles or indices suggests a mismatch in strategy, risk assessment, or asset allocation,” he said.

Your portfolio should be your baby. You should trust your system even when you’re losing money and have faith in your selection of securities, the percentage of your holdings each one represents and your level of overall diversification.

Most importantly, you should know the purpose of all your holdings and why you chose each element of your portfolio in the proportion that you did. If you feel like some of your choices were guesses, or you’re frequently second-guessing your choices, it’s time to ask for help.

“Another tip-off is not being satisfied with your investment portfolio,” said Huffman. “Look out for people who keep questioning their strategy or can’t seem to grasp how it’s working. Such problems often signal that it’s time for a change. Lack of understanding or clarity typically leads to bad decisions.”

If you don’t trust your choices or have faith in your portfolio, you’re vulnerable to emotional decision-making, which is a recipe for failure. If you find yourself panic-selling, bandwagon-buying or choosing stocks based on FOMO, you aren’t secure in your strategy and it’s time to forge a new path.

“An approach consistently eliciting panic or euphoria can indicate a misalignment between the investor’s financial plan and their psychological capacity to endure market fluctuations,” said Smith. “This emotional discord often suggests that the investment strategy is not genuinely tailored to the individual’s financial temperament or understanding, leading to decisions that could detract from long-term objectives.”

Trend investing is adjacent to emotional investing, and if you’re buying and selling based on what’s buzzing, what’s grabbing headlines or what you think the next big thing might be, your portfolio probably needs some spring cleaning.

“Another red flag is if you’re always chasing after hot tips or diving headfirst into speculative investments,” said Tom Bruzek, a land investor and founder of Sell Land Fast. “It’s exciting to think about hitting it big, but relying solely on rumors or gut feelings without doing your homework? That’s a recipe for trouble. If you’re finding yourself in this cycle, it might be time to bring in a pro to help steer you in a more solid direction.”

Major life events should trigger portfolio adjustments — or at least a reexamination of your overall strategy.

“If one’s financial situation has changed — for example, through a salary increase or a fire-sale purchase — then his or her current allocation might no longer be appropriate,” said Huffman. “Significant life events — such as getting married, having children, changing careers or getting close to retirement — are certainly triggers for reconsidering investment needs and changing your approach. Consulting a professional is wise to ensure that your investment strategy fits your current situation and long-term goals.”

It’s not just changes in life circumstances that should guide your investment strategy. Your portfolio should align with your current stage of life and the appropriate level of risk tolerance, which evolves as you age. If not, it’s time to change course.

“For instance, a portfolio that’s overly conservative for a young investor with a long-term horizon or excessively risky for someone nearing retirement might signal a need for strategic realignment,” said Smith.