Follow Three Steps to Financial Health

Finally, part of portfolio management is discipline. Know what makes a particular investment attractive and why a particular security is appropriate for your portfolio. Your criteria may include value indicators such as a low price-to-earnings ratio, growth indicators such as an attractive PEG ratio or income parameters, such as a consistently growing dividend. The potential variables are nearly endless, but your process must be consistent.

You also need to cultivate your sell discipline. It's much harder to sell a stock than it is to buy one. As a result, developing a methodology for taking profits and limiting losses may be the most important part of your investment review process.

Market volatility like we've seen in the past two weeks can cause investor indigestion. However, if you're consistently thinking about your portfolio holistically, you'll be better positioned to see opportunity amid chaos. A regular portfolio review will almost always lead to better decision-making and, as a result, better profits along the way.

Eat right, get regular checkups and live longer. Think about your investments, give your portfolio a regular review and live richer. Consider it financial health insurance.