Your Year-End Financial Plan Checklist – Part 4
Meeting your annual savings goals in your 401(k), IRA, and other investment accounts is an essential part of a successful financial plan. But how and where you invest those savings can make the difference between reaching your goals—and falling short. With markets shifting throughout the year, your portfolio and overall strategy may look different than they did last January. Taking time now to review and realign before the New Year can help ensure you’re still on target. Here are some key areas to focus on as you wrap up the year:
• Revisit your objectives & time horizons
Take a fresh look at each of your accounts and remind yourself of the goal for that money. Is it college funding, retirement, buying a new car or vacation home? Has the target date for needing those funds changed? Is it invested properly to meet the goal and timing?
• Review your risk tolerance
Market fluctuations, personal milestones, and changing timelines can all influence how much risk you’re willing—or need—to take. If it’s been a while, complete a new risk assessment to see if your comfort level has changed. You may find it’s time to adjust the mix or weightings within your portfolio.
• Check your diversification
It’s easy to become intentionally and unintentionally concentrated in certain investments—especially employer stock or popular trends. But concentration risk can increase the potential for large losses at the wrong time. A well-diversified portfolio across stocks, bonds, cash, and even alternative assets can help smooth market volatility and protect long-term growth.
• Rebalance your investments
Even if your goals and risk tolerance haven’t changed, regular rebalancing is key to maintaining your target allocation. By periodically selling overweight positions and adding to underweight ones, you can help keep your portfolio aligned—and potentially enhance returns over time.
A little attention now can go a long way later.
If you’d like help reviewing your risk tolerance and investment allocations, our team can provide some practical tool and resources you can use. https://www.connected-wealth.com/next-steps