As we close out the year, here are some considerations:
The stock market has reached new highs and our balances in our accounts look pretty good. This should be a time to celebrate but do not forget about your tolerance for risk. Your account may be carrying more risk than it did at the start of the year. This is the time of year that you should sell the gains in your accounts and rebalance them into the funds that did not perform well. Sounds counterintuitive, doesn’t it? Well if you create this systematic approach it will force you to buy low and sell high. Often times we let our emotions get in the way of good decision making.
You may have set some savings goals at the beginning of the year. How’d you do? Use the end of the year to reflect on what worked and what didn’t. Make adjustments and set new goals for the new year. If you’re having a hard time finding the extra cash to save then force yourself. Up your 401(k) contribution by a percentage point. As the saying goes, you can’t spend what you don’t have.
Many of us will get together with family over the holidays and spend some quality time. Do you have an older parent or grandparent? It may be appropriate to have a lighthearted conversation about how to plan for unfortunate events. Creating a proper estate plan will help relay their final wishes and makes the survivors better equipped to handle them.