Looking to conduct a review of your investments? Below is a five-point end-of-the-year housekeeping checklist.

Suitability. When it comes to the world of investments, the most common types of assets are stocks and bonds—but they aren’t the only ones. There are alternatives like real estate and commodities and, of course, there’s bitcoin, which has more than doubled this year. Which of these is right for you? Since everyone is different, the first litmus test is to assess the suitability of the types of assets you own.

What does this look like in practice? I’d focus on two points: First is liquidity. Traditional investments can be turned into cash overnight, while alternative investments are often less accessible. So you’ll want to be sure each investment aligns with the timeframe in which you’ll need those funds.

The second factor is risk. While you can’t predict future returns, you can consult past volatility. Things like bitcoin have seen much more significant price swings than stocks. And stocks have seen much more significant price swings than bonds. For some, wild swings wouldn’t be a problem, but everyone is different. Here again, you’ll want to be sure your investments are aligned with your needs.

The key is to avoid what I call the brother-in-law problem. An investment that might be perfectly appropriate for someone else may not be a fit for you. So when well-meaning friends or relatives offer investment tips, you may want to just nod politely.

Asset allocation. Assuming you have a suitable set of investments, the next step is to look at the mix. This is called asset allocation, and while there are many rules of thumb out there, I’m not sure that’s the right approach. Instead, I recommend asking yourself these three questions:

1. How much risk do I need to take? Could you afford, in theory, to hold all your assets under your mattress, or to reach your financial goals, do you need some amount of the growth that the stock market offers?
2. How much risk can I afford to take? If the stock market dropped, how much would you need outside of stocks to carry you through a multi-year downturn?
3. How much risk can I tolerate? This is what I call the Mylanta problem. Even if you can afford a particular level of volatility in your portfolio, you might not be happy about it. So be sure not to overlook this last question.

Asset location. Next is to review the type of account where you hold each of your investments. A common question, for example, is where bonds should be held. If they’re in a retirement account, that shields the interest they generate from taxes each year. But if bonds are in a taxable account, that makes them more readily available, especially if you’re younger than 59½ , the age at which you can take penalty-free withdrawals from retirement accounts.

The bottom line: Each account type has its own tax treatment and, in some cases, access limitations. The key is to allocate your dollars across the set of accounts that best aligns with your withdrawal timeframe and tax picture.

Portfolio structure. In his book, The Missing Billionaires, Victor Haghani highlights an often-overlooked point. Sometimes investors have all the right investments, but they’re still exposed to too much risk because they simply own too much of an otherwise-reasonable investment.

How much is too much? In my view, a good threshold is 5%. If an individual stock is 5% of your portfolio and it drops by half, the overall impact would be a loss of just 2.5%. That might be unwelcome, but it would be tolerable. Even if it turns into the next Enron, the loss would be just 5%—still not catastrophic. If you have a stock that’s over that threshold, you might look for ways to systematically chip away at it. You could give some to charity or to family, or you could sell a bit each month to slowly rein it in.

Individual holdings. How do you know if something is a “good” investment? Below are five ways to evaluate a mutual fund or exchange-traded fund (ETF):

1. If you don’t own any individual stocks and only invest in funds, that’s generally better—but not always. That’s because funds, even seemingly high-quality index funds, can have concentrated holdings. Consider a fund like iShares’s Russell 1000 Growth ETF (ticker: IWF). This fund is diversified across 398 holdings, but just three stocks account for more than one-third of the total. So it’s always worth checking under the hood.
2. Because markets are unpredictable, it’s difficult to know how any given investment will turn out. But according to research firm Morningstar, there is one reliable predictor of mutual fund performance: cost. “The expense ratio is the most proven predictor of future fund returns,” Morningstar writes. “We’ve done this over many years and many fund types, and expense ratios consistently show predictive power.”
3. According to research by finance professors Brad Barber and Terrance Odean, frequent trading is generally counterproductive. This applies to both individual and professional investors. As Warren Buffett once put it, “We continue to make more money when snoring than when active.” If you own a mutual fund, how can you tell if the fund manager is engaged in active trading? This information is readily available and is referred to as the turnover rate. As a point of reference, a diversified fund like Vanguard’s total stock market ETF (ticker: VTI), carries a turnover rate of just 2.2%.
4. A few years back, I told the story of “Jane,” an investor in a fund with very high turnover. What Jane found out after holding this fund for a number of years was that mutual funds that trade more actively also tend to be more tax-inefficient. How can you assess the tax-efficiency of the funds you own? These figures show up in a few places. You could examine the fund company’s website or the 1099 forms generated by the fund, or you could check your tax return. Consult Schedule D of your federal return and look for a line that reads “Capital gain distributions.” If there’s a significant number on that line, it’s worth investigating.
5. A while back, Vanguard announced that investors on its platform would no longer be able to purchase certain types of investments, including funds that employed leverage and those designed to deliver inverse returns. Why? Vanguard singled out these investments because they carry “additional risks and considerations not present in traditional products.” The message: While funds are generally preferable to individual stocks because they offer diversification, some funds—simply by virtue of their structure—carry extraordinary risk. When it comes to choosing funds, my rule of thumb is that the more boring, the better.

A final thought: It’s that time of year when market prognosticators begin publishing their forecasts for the new year. So it’s also a good time to be reminded of Warren Buffett’s observation: “The only value of stock forecasters is to make fortune-tellers look good.”