Now is the time for year-end investment review


Rocky Speight


Rocky Speight
Business Columnist

Monday, November 28, 2016

With the holiday season upon us, you might be busier than usual. However, by spending a few minutes reviewing your investment scenario of this past year, you can see where you’ve been, where you might be going and what you need to do to keep moving forward toward your long-term financial goals.

So, as you look back at 2016, pay close attention to these elements of your investment picture:

— Performance – Reviewing your investment performance over time is important in helping you determine if you’re on track to achieve your financial goals. In evaluating how your investments performed in 2016, ask yourself several questions. How did they do relative to their performance in past years? Were your returns relevant to your long-term goals? If you have already established a return rate you’ll need to reach your goals, were your actual returns on track? Were your return expectations realistic?

— Investment mix – If you are following a well-designed strategy, you probably started out 2016 with an investment mix that reflected your risk tolerance, time horizon and short- and long-term goals. But over time, your investment mix can change. If you owned a certain percentage of growth stocks, and those stocks appreciated in price, they could take up a larger percentage of your portfolio than you had intended, exposing you to a higher risk level. So now that the year is coming to a close, examine your investment mix to see if it needs rebalancing.

— Contribution levels – Are you taking full advantage of your 401(k) or other employer-sponsored retirement plan? The more you invest now, and throughout your working life, the less likely it will be that you have to play catch up in the years immediately preceding your retirement.

— Mistakes – We all make mistakes in every walk of life, including the way we invest. In looking back over 2016, can you spot some investment mistakes you might have made? Did you temporarily bail out of investing immediately after the Brexit vote, only to find, a few weeks later, the markets had soared to record highs? Did you act on impulse and buy a so-called hot stock that turned out to be inappropriate for your needs and risk level? While mistakes like these might be costly in the short term, they can ultimately prove invaluable – if you learn from them.

We’re just about ready to turn the page on the 2016 calendar. So, as you review your investment decisions for the past year, try to determine what worked, what didn’t and what you can do to improve your results in 2017.

This article was prepared by Edward Jones for use by Rocky Speight, an Edward Jones financial adviser in Rocky Mount.