Fall is here. Time for apple cider, warm tights—and your fall investing to-do list. Tackling this now gives you time to make necessary adjustments before the holiday chaos arrives. Here are four tips:
- Review. Do you know what you’re invested in? Why you’re holding it? Do you still believe it will earn you money? If you’re not answering yes, yes and yes, it’s time to rethink some holdings. Plug your investments into Morningstar’s Instant X-Ray to take a critical look at your portfolio.
- Rebalance. Is your asset allocation out of whack? If your ideal exposure to, say, small caps is 15% of your portfolio, but it’s now 25%, consider selling (or adding more to other investments) to get back to 15%. (If selling in a taxable account, consider your tax hit and trading costs; with a 401(k) or IRA, taxes won’t be triggered by rebalancing.)
- Increase. There’s still time to squeeze more dollars into your IRA or 401(k). This can be a great way to save and reduce your 2011 tax bill. Don’t have an IRA? Set one up!
- Protect. Most investment accounts should have a beneficiary. Is your IRA slated to go to your lame boyfriend from 1995? Review and update who you’d like to receive the money.
Get it Done: What financial tasks will you tackle this fall?
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