Lose weight( from excess fees)
The U. S. stock market has had a tremendous year, but if your portfolio’ s performance is a bit sluggish, it’ s time to take action. Costly fees may be weighing down your portfolio and hampering its future potential. A NerdWallet study found that a millennial paying 1 % more in investment fees than his peers will sacrifice nearly $ 600,000 in returns over 40 years.
Don’ t be that person. Here’ s how to trim the fat: Take note of the expense ratios for each investment in your portfolio and then research whether less costly alternatives will let you achieve the same goal. Have an account with an online broker or robo-advisor? Many of these providers offer access to financial advisors who can assist with this process. Or you can consult with one directly.
Eat healthier( in your portfolio) This time of year, it’ s easy to overindulge on sweets, whether at the dessert table or within your portfolio.
With U. S. stocks up about 20 % in 2017, your once-healthy portfolio probably has gotten out of whack. It’ s time to restore your intended allocations to stocks and bonds. Experts recommend at least 5 % to 10 % of your portfolio be allocated to bonds, but your strategy may vary depending on your risk tolerance or age.
In 2018, resolve to rebalance your portfolio and set up automatic rebalancing, a feature offered by many providers or inherent to target-date funds you may have in your 401( k). Sometimes that’ s as simple as a click of a button.
Get( your accounts) organized
So you’ ve packed up old clothes and donated them to charity. But that 401( k) from your first job? Somehow it’ s still hanging around.
Let 2018 be the year you finally roll over your old 401( k) into an IRA. Why? You’ ll most likely pay lower fees than with that old employer’ s plan, plus you’ ll gain access to a broader selection of investments and possibly more guidance from your new broker.
A rollover will require you to fill out some paperwork and funnel money into new investments, but it’ s time well-spent. Lower fees, greater flexibility and more money at retirement? You can probably spare a couple of afternoons for that.
Learn a new( investing) skill
While your friends learn French, Parlez-vous investing? If you answered no, your burgeoning interest is calling.( We know it’ s there; you’ re reading this list.)
It’ s easy, and often wise, to take the set-it-and-forget-it approach to investing. But that may not be enough to satisfy a curious mind. Becoming“ invested” will make you more engaged in the lifelong pursuit of managing your finances. Gravitate to what interests you, be it reading an investing book, researching how options work( hint: they’ re not as difficult as they seem) or trying your hand at trading stocks.
Just be sure to keep your newfound hobby in check. Reading a few books does not the next Warren Buffett make, nor should you overhaul your portfolio to chase the latest investment du jour.