Well, here we are, starting a fresh, in a new decade—after one that many investors may wish to forget. The New Year is a perfect time for turning a new leaf, wiping the slate clean, or whatever other clichéd saying you’d like to employ. On a serious note though, shouldn’t every investor pause and do some financial reflection at least once a year?

Now is the right time to ask a few simple yet important questions that may give one the resolve to stick to a plan, alter details or start anew. Maybe this month will be that time for you.

The following are a few of the more important questions every investor should be asking themselves on at least an annual basis. If the answers are not positive, it may be time to evaluate alternatives.

Am I taking on too much risk in my investment accounts?

The past decade was one of the most damning for stock investors, ever. During that time, we endured two market meltdowns—the tech and 9/11 induced one which lasted two years 2000-2002, and since 2007, the current credit crunch. All of which squeezed the average annual returns of Canadian stocks to a paltry 3 per cent. This rate of growth was about a third of the average returns seen in the 1980s and 1990s. No doubt did presented challenges and changes to the retirement timeframe for many Canadians.

Luckily, 2009 saw a tremendous rebound in stock prices. The gains in stocks this past year have, at least partially, repaired accounts and personal balance sheets. Now that we’ve recouped some of those losses, the question is whether you as an investor are comfortable with the level of risk within your portfolio. I suggest investors ask themselves whether they have the intestinal fortitude to withstand a drop of equal percentage to the drop that occurred in 2008. If the answer is no, investors may be well served to reduce their risk exposure.

Because all we hear about in the media is stocks, most investors seemed to be hard-wired to believe that stock investing is the only way to have meaningful long-term growth. This line of thinking simply is not true. Taking a more balanced approach by investing in different asset classes has the potential to provide long-term rates of return which are very comparable (sometimes even better!) than all-equity investing. It will also provide the pleasure of lower blood pressure.

Am I paying too much in fees?

Over an individual’s total investment horizon, one of the greatest determinates of overall investment returns is the level of fees paid throughout that time period. It seems we are told this often enough, but few investors pay enough attention to actually seek a change.

The explanation for why fees take such a bite out of returns is mathematical, but simple enough to understand: every time fees are levied on an account, they represent assets that no longer have the ability to grow and compound on themselves over time. The complicating factor with fees, however, is that it can be very difficult to get a handle on what exactly you’re being charged. Mutual funds typically have a stated management fee which is typically the largest single fee charged to investors.

Meanwhile, typical fund companies take this fee directly from the fund which subtracts from performance and makes it is very difficult to see how much is actually taken. Canada has some of the highest mutual fund fees in the developed world with management fees for stock or balanced portfolio’s typically ranging between 2 and 2.5 per cent. Add to this numerous other potential fees like commissions, account administration or transaction fees and it can become a serious hurdle just to clear the fees before you start actually earning a return.

There can be surprising differences between investment providers and, as a New Year resolution, investors are encouraged to find out exactly what they paying and determine whether they’re getting their moneys worth.

Do I have someone I trust and with whom I can discuss my account when I want?

I’m not sure the importance of an advisor type relationship can be overstated to the average investor. This is not to say that everyone needs this type of relationship. More sophisticated investors who have the time and knowledge to manage their own accounts may not want or need someone else to help with their portfolio, this is true. For most, however, an advisor provides a knowledge base to help create an investment plan and the determination to stick with it. There are plenty of stories of investors who, during times of stock market stress, simply threw in the towel and moved into cash. This can be an incredibly hard position to recuperate from and is one that could typically be avoided.

Having a professional available to help you understand your own risk tolerance, create a portfolio using this knowledge and then provide you with the support to stay on course is vitally important to long-term investment success. Human emotion tends to lead us to a desire to buy when prices are rising and sell when prices are falling rather than the other way around. A trusted advisor can help to interpret the market and provide guidance to stick with an investment plan.

Are my investments evolving with me as I approach retirement?

There’s an old investing axiom that says an individual’s portfolio should contain a percentage of fixed income investments equal to their age. If you are 60 years old, you should have 60 per cent of your investment portfolio in bonds, as the saying goes.

Although most would agree with the underlying principal, namely that older clients must be more conservative, the rule is definitely an over simplification. The actual make up of any individual’s portfolio must be dictated by their personal situation and future needs. Regardless of how different any two individuals may be, the vast majority of investors require portfolios that evolve over time.

Not only do people tend to require more conservative portfolios as they age, but because individual investments grow at different rates over time, it’s necessary to re-evaluate portfolios and rebalance over time. At the very least, an annual evaluation should be made to ensure your portfolio is not out of alignment.

Considering that personal investments are what most Canadians rely on to fund their retirement, most do not pay them enough attention. Getting into a routine of evaluating one’s own situation and asking some simple questions can make a big difference to not only your bottom line, but also your peace of mind. So here we are, fresh into a new decade. Do you know where your investments are?

Sean Weaser is a principal and analyst at Integra: Private Investment Management. He is open to feedback or questions and can be reached at sweaser@integra.com.