My Summer Thoughts for Refreshing Your Portfolio

As the pace slows, your sense of long-term perspective grows. In investing that’s invaluable, especially after a turbulent time like the first half of 2025 when the threat of U.S. tariffs has roiled some equity markets while having little effect on others.

As you find some time for yourself, you can reflect on whether your portfolio still matches your investment objectives – whether they be building wealth, saving for retirement or simply putting aside a financial cushion as a buffer against the unpredictable. With the sun shining, the noise fading and daily market movements receding into the background, you zoom out and your judgment sharpens.

From Rebalancing to Enhancing

After a turbulent period like the last 12 months, with different investments registering very different performances, your portfolio’s asset allocation might no longer match your views. Is it time to adjust the balance of your portfolio if it no longer reflects your risk appetite?

Take cryptocurrencies as an example. They have been on a rollercoaster ride over the last 12 months, ultimately ending up considerably higher.¹ But if they have become a far bigger part of your portfolio is that appropriate?

When considering the right balance for your portfolio, perhaps compare it to the global market portfolio (see Chart 1), which weights assets in line with their market capitalizations. This provides a rough idea that you can adjust depending on your preferences.

Chart 1: Share of Asset Classes within Global Market Portfolio

Market size of the full and investable global-market portfolios (in relative weights of the asset classes)

Source: The Global Multi-Asset Market Portfolio, Doeswijk et al; As of 31 Dec 2023. The Global Market Portfolio (GMP) reflects the total value of all investable assets worldwide, capturing the full spectrum of opportunities available to global investors. As such, it serves as a logical reference point—or natural benchmark—for long-term strategic asset allocation decisions.

When doing so, you should include all your assets — this includes not only financial investments, but also your human capital², your pension or your home. For many individuals, their own ability to earn income, their human capital, represents a significant portion of their overall wealth. Since future income streams often behave similarly to fixed income assets, they can provide a degree of stability that may justify a higher allocation to equities within the broader portfolio.

You might also think about adding new ideas or alternative investments to your portfolio. Take quantum computing, for example. It’s starting to move from scientific research into real-world applications — but it's still early days, and it’s a theme best suited for long-term investors.³ Gold can remain a strategic allocation for those seeking stability in times of uncertainty and waning trust in traditional financial systems. And despite their volatility, cryptocurrencies continue to attract attention, supported by strong recent performance and growing institutional interest.⁴ Still, above assets can be volatile and are sensitive to shifts in sentiment or regulation. Past performance is not a reliable indicator of future performance.

A seasonal reboot

Summer is a great time to step back and consider all these questions, especially for individual investors. The relentless rise in European households’ financial assets (see Chart 2) is a good thing as they take greater responsibility for their futures. But it means individuals must ensure that they’re well diversified, to minimise the risk of a crisis undermining their financial security and putting investment goals out of reach.

Chart 2: The relentless rise in households’ financial assets (2010-2023)

Total Financial Assets (EUR Trillions)

Source: ECB Data Portal (2024), HCFS Time series, VanEck. Other type of financial assets is a derived variable representing: total amount of money owed to a household by others, value of non-self-employment private business wealth, managed accounts and other financial assets. This definition comes directly from the ECB

As people learn about how to build their investments in line with their objectives, it’s a good idea to look for hidden risks. For example, if you work in the tech industry, should you also concentrate your investments in tech? In the event of a sector-specific downturn, there’s a risk that both your income and your portfolio could be negatively affected at the same time. This risk becomes even more pronounced if a significant part of your portfolio consists of stock in the very company you work for—since your employment and investments are tied to the same business performance.

Summer gives you a few weeks to relax, reflect and reset. While other commentators might suggest holiday reading lists, I think it’s an ideal time to make some decisions about your investments.

Whether you soak up the sun, spend time with your family or play some sport, summer is a season that reboots you. The same can be true of your portfolio.