MAKING MONEY | Time to spring clean your investments

Completing a tax return inevitably means going over a year's worth of paperwork, from bank statements to investment records.

It can be something of a trip down memory lane. But it can also confront us with some hard realities - like how much we spend, and how well - or poorly - our investments have performed over the past 12 months.

On the spending front, experience tells me that Australians frequently underestimate how much they pay for financial products. Research by UBank found 85% of homeowners don't know their home loan rate. If the vast majority of us are hazy about the cost of our mortgage, it's a fair bet that plenty of investors don't have a clear idea of the fees they are paying. This tax time, use the opportunity to take a closer look at your investment statements to check the fees you're paying.

While you're checking out your investments, it's a good idea to see if your portfolio is still in line with the original proportions you first established - in other words, if your 'asset allocation' is out of whack.

The sharemarket falls seen in March may mean your portfolio's weighting to shares is below your target level. This is a problem that can easily be solved by drip-feeding funds into the asset classes that you are underweight in. It's a way to avoid triggering a capital gains tax liability on the sale of investments you are overweight in, while also giving your portfolio the benefit of dollar cost averaging.

This process of rebalancing is like a spring clean for your portfolio. And the end of the financial year can be a good time for the job, as it can provide opportunities to manage tax on your investments. If you cash in any poor performing investments in your portfolio, you may be able to offset the losses against capital gains on those assets that you've sold for a profit.