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Investing Resolutions for 2017

Written by Brian Puckett, CFP®, CPA/PFS, Attorney at Law.

Now is the time of year when many people make New Year’s resolutions. Oftentimes, these pledges relate to staying fit, losing weight or enjoying life more. As you are thinking about ways to improve in 2017, we encourage you to give some thought to how you can be a better investor in the coming year. As such, here are a few investing resolutions designed to help you better achieve long-term portfolio growth.

Stay balanced and diversified

Think of investing like sticking to a well-balanced diet. For most people, a few extra holiday treats won’t make a difference long-term, but if you continue to overeat, you may find that the scale has tipped in an unhealthy fashion. The same is true with your portfolio. Markets fluctuate all the time and that’s why it’s so important to evaluate your portfolio at regular intervals to make sure you still have a healthy balance of stocks, bonds and cash. This is called your asset allocation and it depends largely on your age, goals and other factors. Within your portfolio, you also need to make sure that you remain adequately diversified and don’t become too highly concentrated in one particular investment or sector. Periodic check-ups can help ensure your portfolio remains on track for your long-term goals.

Stop trying to time the market

In the weeks following President-elect Trump’s defeat of Hillary Clinton, stock markets responded euphorically, with the Dow reaching new all-time highs, for instance. We’ve fielded several questions from clients about how to time the market to reap the most benefits. Our answer is a consistent one: there is no good way to time the market, and gambling on its direction is often a losing bet. Certainly, when markets have risen or fallen, there may be situations where it makes sense to harvest gains or losses. But typically, for long-term investors, the best course of action is to stay the course.

Invest your extra cash

Three-quarters of companies plan to give workers a cash bonus this year, according to a new survey from staffing firm Accounting Principals. That translates into an average bonus of $1,081, up about 25 percent from last year, the findings show. Don’t let money you receive around the winter holidays burn a hole in your wallet. Invest that extra cash in stocks, bonds, mutual funds or other appropriate investments, and take advantage of the interest income to help grow your nest egg. When it comes to building a solid portfolio for the future, every little bit you add can make a difference.

Ask for help

Don’t let questions over how to invest properly or save for the future keep you awake at night. Whether it’s saving for a home, setting money aside for college or building a solid base for retirement, we at Align, can help you define, design and realize your financial goals. Please don’t hesitate to reach out so we can help you craft a personalized plan to help make your dreams a reality.