3 Crucial Portfolio Moves to Make Before the End of 2026

The end of 2026 is fast approaching. At the end of each year, it's a good chance to take stock of your financial life and figure out what changes you might want to make for the new year ahead.

This doesn't mean you have to make massive changes like selling all your stocks. It doesn't mean you should try risky strategies like market timing. Instead, your year-end portfolio moves might be smaller and simpler.

But whether you are preparing for volatility or giving your portfolio a checkup, the end of the year can be a smart time to reassess how your money is working for you -- and make sure that your investment choices are still a good fit for your long-term needs.

Here are three low-effort, high-impact portfolio moves that you might want to think about making before the end of 2026.

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1. Check on your asset allocation

Many investors try to stick to a targeted asset allocation based on their age, risk tolerance, and long-term financial goals. For example, someone who is still in their early 30s, with 30 or more years left to work and invest, might want to put 100% of their long-term investment assets into stocks, while someone who is in their 50s and getting closer to retirement might want to shift a higher percentage of their money into bonds.

If your stocks have had a banner year, your portfolio might have gotten out of balance. For example, if you want a mix of 80% stocks and 20% bonds, but your stocks have gained value to the point that your portfolio's value is now 90% stocks and 10% bonds, you might want to sell 10% of your stock holdings and put that money into bonds to rebalance your portfolio.

Even if you don't make any changes, this year-end portfolio move is a good chance to reacquaint yourself with where your investments are held. It's also an opportunity to diversify in response to changing market conditions.

2. Take advantage of tax-advantaged accounts

There's some debate in the financial planning world about whether it's always a good idea to max out a 401(k) or other tax-advantaged retirement account at work. It depends on how you feel about the investment choices (and fees) offered by your 401(k) plan and how generous the employer match is at your job. Some people might prefer to contribute just enough to get their employer's 401(k) match, and put additional money into a taxable brokerage account to preserve their flexibility.

But whether you max out your 401(k) contributions or not, the end of 2026 is a good chance to take a fresh look at how much you've saved in tax-advantaged accounts this year. Depending on which accounts you use or qualify for, year-end can be a good time to put some extra dollars into your 401(k), Roth IRA, traditional IRA, health savings account (HSA), or 529 college savings account.

3. Re-evaluate your risk tolerance

The stock market was volatile in October. After reaching a new record high on Oct. 6, the S&P 500 index (SNPINDEX: ^GSPC) lost about 3% by the end of the month. Investors are having doubts about artificial intelligence (AI) stocks, with high AI capex sometimes outweighing investor enthusiasm for what AI can do.

How are you feeling right now? If a three-week 3% downturn in the S&P 500 doesn't faze you, then good. You might want to just keep buying stocks and stick with your plan. But if you've been losing sleep about a possible bear market in 2027, now could be a good time to take some money off the table. The best time to sell stocks is right before a stock market crash -- and no one knows when that will happen.

This doesn't mean you should sell all your stocks. But think about how you might feel if the S&P 500 goes down by another 10%, 15%, or 20% in 2027. Would you regret staying invested at your current levels of stock holdings, or would you rather move some money into bonds to diversify and ideally provide some stability in your portfolio?

Keep in mind that in the long run, the S&P 500 has always bounced back from even the worst crashes and crises. In the past 98 years since 1928, the S&P 500 has compounded at an average annual rate of return of 9.98%. Over the past five years, the Vanguard S&P 500 ETF (NYSEMKT: VOO) has delivered about 12% annualized returns, even with a bad bear market in 2022.

It's possible that we won't have a stock market crash in 2027. It's also possible that even if the market goes down next year, right now is still a great time to invest in the S&P 500 -- if you are a long-term, buy-and-hold investor who can stay invested for several years.

You don't have to make massive changes as part of your year-end portfolio moves. But using this time of year to do some simple housekeeping and getting back in touch with your account balances -- and opportunities for year-end contributions -- is always a good idea.

Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.