Possibly you have changed your mind about which sectors to invest in. For example, you may have made a sizeable profit from North America and feel that it's time to invest elsewhere. On the growth front, Europe is very much the "in" market, while Japan is "out of fashion", with emerging markets only for those prepared to take high risks.
Most advisers will say that it is impossible to second guess stock markets. They claim, however, that you will do best by being invested rather than being out of the market - even in the highly volatile markets.
Research by Fidelity, the largest international fund management group, shows that trying to avoid periods of high volatility by cashing in "can do more harm to long-term investment returns than good". Its research into equity timing shows that the main returns tend to be concentrated in a small number of trading days. The strongest rises tend to follow sharp market falls, just the time when sellers are still likely to be out of the market.
Just missing the best 10 days in the UK between the beginning of 1988 and the end of last year would have reduced the growth in a notional investment in the FTSE All Share Index from 14.9 per cent a year to only 4.8 per cent. Other markets such as the US, produce similar results.
"If you are worried about markets, you should not dip in and out of them - how will you know if you are going to get your timing right?" says Ann Davis, a director of Fidelity. "It is more important to review your portfolio regularly as your objectives and aims may change, as may your attitude to risk."
After the summer global stock market shake-out, you should be able to see how your investments have compared with the competition. You should still consider doing so if you are unhappy with your portfolio.
If you want to switch unit trusts, OEICs or investment trusts, then you will have to pay the usual dealing fees, including initial charges. With a Pep or a unitised personal pension, some managers will allow a free annual switch once a year or more often while others make a small nominal charge, usually under 1 per cent. If you want to transfer to another Pep manager, this is usually done for free. Transferring or stopping payments into a personal pension, however, can be expensive.
"After three years is a good time to assess performance - so many groups have changed ownership and many managers have moved on to other jobs in that time," says Jason Holland of BEST Investment Brokers, which specialises in Pep and unit trust investment.
His company regularly reviews all funds that are Pep-able and has found that while there are number a top performers, there are quite a large number of "dogs", funds that always seem to underperform. It defines a dog as one that consistently fails to beat its benchmark index, by 10 per cent or more.
"While some managers have forecast the market correctly, quite a few have consistently got it wrong," says Holland. And unless there is a convincing argument otherwise, these are the funds to switch.
Sometimes it's worth waiting to see, to "give the manager the benefit of the doubt". For example, a number of M&G's funds have had poor records during the second half of the 1990s. "The group has now had a thorough review, appointed a number of new fund managers and is overall much more disciplined. So it's worth waiting to see what happens," says Holland.
TrendTrack advises independent financial advisers on which funds in the major groups they should be switching clients' personal pension and Pep money into. Costing pounds 150 a year, the service was started by Bob Luty in 1996. It tracks fund performance throughout the year, looking at 30-week moving average prices. "For most groups, the advice to switch seems to occur around twice a year" says Luty.
At present, for most groups TrendTrack is advising US and European investment except for CU, where it advises its fixed interest fund. "If clients with a Skandia MultiFund investment had followed our advice on 8 December last year to switch into its Fidelity American units, they would have made a profit in excess of 17.5 per cent," says Luty. Of course, statistical methods can't give notice of a stock market crash. "We didn't foresee the events of July," he says, "but it's the job of advisers to warn of events like that."
BEST Investment Brokers, 0171-321 0100; TrendTrack, 01484 854443
BEST Investment is about to produce a new review of so called `dog' funds. The new list is available to `Independent' readers who call the company on 0171-321 0100Reuse content