Spring Clean Your Financial Life

Spring Clean Your Financial Life

Spring offers the perfect opportunity to refresh various aspects of our lives, including our finances. Just as we tidy up our homes and declutter our spaces, it’s essential to give our financial portfolios a thorough examination to ensure they’re aligned with our goals and aspirations. Here are four items to consider to help bring order to your financial life.

Update Your Contact Information

Start by logging into the portals of your tax-advantaged retirement accounts and taxable investment portfolios. Review your contact information and make any necessary updates. Ensuring your phone numbers, email addresses, and home addresses are current is crucial for receiving important communications regarding your accounts. In addition, consider updating your passwords and setting up two factor authentication for improved security.

Review Account Titling and Beneficiaries

Take the time to review the titles and beneficiaries on your accounts. Are your accounts titled according to your estate planning attorney’s recommendations? If you have a trust, is it properly incorporated into your account titles and beneficiaries? Life changes such as marriage, divorce, or the birth of children may necessitate updates to your account titles or beneficiaries to ensure your assets are distributed according to your wishes.

Consider Diversification

How are your portfolios invested? Do you hold individual stocks or have you achieved a globally diversified portfolio? Diversification is the practice of spreading investments across a variety of asset classes and it is a time-tested strategy to mitigate risk. Essentially “Don’t put all your eggs in one basket”. Historically, a globally diversified portfolio has been more efficient and predictable than individual stocks. A single investment portfolio can hold thousands of stocks, typically found under the hood of an ETF or mutual fund. If you’d like to learn more about the power of diversification, take a look at previous articles written by David Booth, Executive Chairman and Founder of Dimensional Fund Advisors.

Assess Allocations

After a diversified portfolio, one of the most important investment decisions you can make is your portfolio allocation to stocks and bonds. Does your current stock and bond allocation align with your financial goals and risk tolerance? Adjusting your allocations can help realign your investments with your objectives. Remember, your personal goals and life circumstances should dictate how you are invested, not today’s newsreel.

At ShankerValleau, we enjoy helping bring order to your financial life – so call us!