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Don't Take a Vacation From Monitoring Your Investments

Don’t Take a Vacation from Monitoring Your Investments

Now that summer is in full swing, you’ll probably be enjoying time off at your favorite vacation spot, if you haven’t already. One of the last things that’s likely to be on your mind this time of year is your investment portfolio. But after you get some well-deserved rest, you might want to take some time to make sure your investments are working harder than ever to meet your financial goals.

Review Your Investment Mix. If you’re a long-term investor, you’ve probably been advised countless times to avoid the temptation to tinker with your portfolio as the value of your investments go up and down. Many experts say your investment expectations should be based on a long-term time frame, so you shouldn’t worry too much about temporary downturns in your portfolio’s value. That’s good advice, but that doesn’t mean you should put your investments on automatic pilot.

If you haven’t looked recently at how much your portfolio is invested in cash, stocks and bonds, you might be in for a surprise. The stock market’s volatility in recent years could mean that your portfolio has become unbalanced. If your investment plan assets have shifted in value, your portfolio could be exposed to more risk than you want. You may want to reposition some of your assets to reflect your investment goals, time period to invest and comfort level for risk.

Give Your Budget A Mid-year Checkup. Now that your annual household budget has been in place for half a year, look at how your spending is matching up with your budgeted amounts. For example, if you budgeted $1,000 for new clothing this year and have spent $800 through July, you have only $200 left for the next six months of the year. That should not only be a warning sign to curtail your shopping sprees but an indicator that you may be in danger of tapping your savings and investments to pay for expenses exceeding your income.

Identify Maturing Municipal Bonds.  Many municipal bond issues typically mature in June and July. If you didn’t make a plan ahead of time, now you need to figure out how you’re going to reinvest the principal you receive from your maturing bonds. Before deciding how to reinvest your bond proceeds, determine whether your investing timeline, goals and risk tolerance have changed. If not, you may want to buy more municipal bonds to replace those that have matured. Your need for federally tax-free income, your tax bracket and your investment objectives should serve as your main criteria for determining how municipal bonds fit into your overall investment strategy. Be aware that you may receive a lower interest rate on municipal bonds purchased today. Because municipal bonds are exempt from federal taxes (unlike Treasury bonds), you may end up with more in your pocket after taxes by buying municipal bonds and holding them until maturity. Keep in mind municipal bond income payments may be subject to local taxes, state taxes and/or the alternative minimum tax.

Give yourself some time to relax this summer. But don’t take an extended vacation from monitoring your investment portfolio and investment plan. In the long run, you’ll rest easier knowing that your investment plan is on track to helping make your dreams come true.


This article was written by a third party and provided courtesy of G. Pete Fields, CLU, ChFC in Littleton, CO at 303-233-5150

 Investments in securities and insurance products are: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

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