While summer may bring thoughts of shaping up for swimming, it’s also a good time to take a break from the gym to make sure finances are in solid shape.
Here are six tips to help get your investment portfolio into prime condition.
Shed the weight of extra accounts. It’s not unusual to acquire multiple retirement accounts over the years, especially for those who have changed jobs several times.
Consider consolidating them to simplify investment management. If you have retirement assets with a former employer, it could be to your advantage to roll them over to your own individual retirement account for more control of how your money is invested. Consolidating accounts may also make it easier to monitor the performance of investments and provide the opportunity to ensure they’re properly allocated.
Bulk up your retirement savings. Ask yourself these questions: Have you given enough weight to what you’ll need in savings to retire comfortably? Are you taking full advantage of employer matching contributions and maxing out your IRA each year? Sock away as much as you can to build your retirement nest egg.
Grow stronger. Fluctuating financial markets impact industries and individual investments differently, and often in ways that are difficult to predict. You can strengthen your portfolio by making sure your investment dollars are spread across a variety of investments. With diversified investments, your overall portfolio is not as likely to be derailed should one investment topple in value. Rather than trying to pick individual stocks and time the market, consider pacing yourself with systematic investments and thinking long-term.
Achieve the right balance. In light of the fickle nature of financial markets, even a well-balanced portfolio can look different than what you may have expected in time. Therefore, it’s wise to periodically assess the volatility of your investments across and within asset classes – stocks, bonds, and so forth – and rebalance your portfolio to achieve the desired asset allocation. A financial adviser can help you apply asset allocation strategies and may have access to tools that will help you decide what may be a good match for your risk tolerance and goals.
Trim your waste. The Internet has made it easy to securely monitor your financial affairs while also helping to minimize paper waste.
Question every printed piece you receive related to your portfolio. Is it absolutely essential to receive a paper statement? Do you really need to print that 100-page prospectus? Review the options provided by your financial institution and take advantage of their green initiatives if you’re comfortable managing your accounts online. With regard to your personal paper trail, keep in mind that your tax records and supporting documents should be maintained for seven years, while credit card statements can be tossed after a year. When disposing of documents, always use a shredder to keep your personal information safe from identity theft. Follow this advice, and your file cabinet will be slimmer in no time.
Enlist a personal trainer for your finances. Like many activities, managing investments is more fun – and potentially more productive – when you have a knowledgeable person by your side.
A skilled financial adviser can guide you through simple exercises to help improve your investment fitness and cheer you on in pursuit of your financial dreams and goals. Together you can apply disciplined strategies designed to strengthen your investment portfolio and help you get in the best financial shape of your life.
Paula Dougherty, CFP, ChFC, CLU, is a senior financial adviser with Dougherty & Associates, Ameriprise Financial Inc. in Springfield. She is licensed in Missouri, Arkansas, Kansas, California and Arizona, and may be reached at paula.j.dougherty@ampf.com.
