3 Things to Understand about Your Investments

Investors who have financial advisors are on the path to financial freedom, but that does not necessarily mean they should sit back and ignore their portfolios. Investing is a never-ending process, and your relationship with your financial advisor is an ongoing partnership. That means it is a good idea to be educated about your investments. You can start by asking the three questions below.

How am I invested? You would be surprised by how many investors don’t know the answer to this question. Start with the basic asset classes: Are you invested in stocks, bonds, or cash? Then move on: Are you invested in any alternatives, such as real estate and commodities? Then ask about the allocation: How much of each asset class are you invested in? And are you invested directly in those assets or via mutual funds? And how might you expect that mix of assets and investment types to change over time?

Are changes warranted? When to buy or sell depends on several things. What is happening in the overall market (i.e., a bull or bear market)? What is happening in the asset class? Is the buy or sell price attractive? If you should buy or sell, how much and when? And what will you do with the proceeds? Are there other investments that you believe have more potential? As you can see, a change isn’t as simple as it seems.

What do I do with winners and losers? When your investments fare well, do you keep them or sell them? Not all investments work out, however well planned, and successful investors should know the answer to this question (and the reasoning behind it). In other words, have a plan for investments that are performing well and for those that are performing poorly.

If you need help answering these questions, please reach out to us.

7 Ways to Get Financially Healthy and Keep on Track in 2020

Investing advice may come and go, depending on the economic environment, the ebbs and flows of the markets, and the life stage of the investor. But foundational financial advice is timeless. Here are seven tips to keep us on track.

Save part of your income every month. This is true regardless of your life stage. If you are in your working years, save for retirement. If you are retired, save for emergencies.

Use automatic deductions if they are available. Maybe your employer offers automatic paycheck deductions, or maybe you can have a little transferred to a mutual fund each month.

Track your income and expenses. Again, this is true regardless of your life stage. You should do it when you are working, and you should do it in retirement. Knowing what comes in and goes out is the key to financial freedom.

Avoid overspending. Avoid buying on impulse. How? Create a budget. Plan your dinner menus in advance. Make a shopping list and stick to it. Keep the money in your wallet to a minimum.

Consider gifts carefully. Gifts and donations may seem like they do not count toward your spending, but your generosity should not threaten your financial security.

Take advantage of your employer’s offerings. If you have a retirement savings plan, a health savings account, or a pre-tax transportation plan, use them. They save money on taxes, and even small savings add up.

Be conscientious. Keep track of your bills, whether they are mailed or accessed online. Review your bank and credit card statements monthly. Pay your bills on time. Refinance mortgages and other loans when it makes sense. Don’t sign anything without reading the contract.

If you need help with your financial planning, please contact us.