On Course: How to Review Your Investments

On Course | May 25, 2021 | Volume 21, #5

Welcome. We at Compass Planning continue to appreciate your support. Thank you.   As a reader of On Course, you know how important it is to make a plan! This month we're giving you some tips about how to review your investment portfolio. In any market -- and particularly these days -- reviewing your investments allows you to stay on that plan.   In you missed our series on retirement, you can still access the issues. For Retirement, Part 1 - Retirement Savings, click here. For Retirement, Part 2 - Social Security, click here. For Retirement, Part 3 - The Retirement Paycheck, click here.   If you would like assistance reviewing your investment portfolio, we are here to help you stay On Course!   Jennifer Lane, CFP   How to Review Your Investments     So much has happened in the market over the last year, we believe it's even more important than ever to review your investments regularly. Here's how.   Gather all your information You'll need paper or online statements from your bank savings and checking accounts, IRA/Roth accounts, 401(k) or 403(b), annuities, pensions, stocks, and bonds. First step -- an important one -- is to make sure all the contact and beneficiaries information is correct. This is an area people often forget, with potential unhappy consequences. Then try to consolidate where you can, which will help you manage the portfolio more easily. Once everything is up-to-date, share relevant information with your lawyer, spouse/partner, and other estate planning people.   Review Your Asset Allocation Good investing means picking a diverse array of investments to help grow your money while managing the variety of risks your portfolio faces. Your asset allocation should consider how best to mix risk with return, considering your time frame and the amount of risk you're willing to take. When reviewing your asset allocation, use the big picture, i.e., don't focus on one stock or fund. When a position is new, you'll more easily notice the immediate gains or losses. Short-term value changes are not a reason to sell a position. If you have a plan, then you know the asset allocation that works for you. If not, consider consulting a fee-only financial planner. Check your online accounts to see if your firm provides an asset allocation section, which will show you the current allocation. (Another reason for consolidating your accounts as much as you're able.) Morningstar has a free app as well as a premium app ($199 per year) to track your portfolio. Bankrate's Asset Allocation Calculator is another option.   Rebalance and make adjustments Rebalancing makes sure you sell what's done well and buy what has done less well. In other words, you will be selling high and buying low without trying to time the market! For cash flow or a savings target, figure amounts needed. Retirees should estimate how much they will need to pull out for ongoing expenses and/or required minimum distributions. Understand the transaction fees and tax consequences associated with each investment you sell or buy. Compass Planning clients can ask for a Smart Portal link, which will help you see difference between mix and target asset allocation. Another website to use is CalcXML, which has an asset allocation calculator in addition to many other helpful tools.   A cautionary note on cryptocurrency Crypto is a digital currency that can be used to buy goods and services and uses an online ledger with strong cryptography to secure online transactions. Bitcoin is the most famous; Dodgecoin is the most infamous. Bitcoin arrived on the scene 12 years so the concept is still new in the investing world. From our perspective, it is still speculative. Needless to say, you need to have a high risk tolerance to invest in crypto right now. If you're interested and want to invest for fun, just make sure you play with an amount that you are willing to lose!

Everyone lives on limited resources, so it's very important to be sure your resources are applied toward your most important goals. Being sure that you're making choices to spend deliberately so you can manage an achievable goal is key to good personal finance. Regular, positive communication about money between partners or setting aside time to focus on your money if you're single is a critical part of getting and staying on track.   Get more tips in Jennifer's book Buy Now   Jennifer and Sarah were both named 2021 Boston Five Star Wealth Managers.   Helpful Websites     Asset Allocation Calculator   Let's Make a Plan   Morningstar Portfolio Manager

Jennifer In The Media

Below are links to Jennifer's frequent contributions to financial planning articles.   NEW!! NBC10 consumer investigative reporter Leslie Gaydos interviewed Jennifer for savings tips. For a great video, How to Save $1,000 in 5 Months, click here. For the written article, click here. Jennifer contributed to a timely article, How to seek forbearance on your mortgage, for The Boston Globe. Read article. If you’re interested in dividend funds, Jennifer contributed to The New York Times article, Dividend Funds Can Add Income, and Risk, to Your Portfolio. Read article. Jennifer contributed to a BankRate article, Should I combine my mortgage and student loans? Read article. Need help with your 401(k) during the pandemic? Jennifer contributed to a Boston Globe article, Five tips for managing a 401(k) during the pandemic's turbulence. Read article. Jennifer contributed to the Bottom Line Inc article Prepare your Finances for a Possible Recession. Read article. Jennifer contributed to The Wall Street Journal article If Saving During a Pandemic Is Hard, Here's How to Stay Motivated. Read article. The New York Times featured Jennifer in an article titled, Balanced Funds Don't Inspire Fear or Greed. That's Why They Are So Useful. Read article. With a contrarian view, Jennifer contributed to an article, People are enraged by the idea that you should have twice your salary saved by the time you're 35! published recently by Business Insider. Read article. Moving in together? Check this article from Business Insider, Five questions you and your partner should answer before taking the biggest step in your relationship. Read article. Insider asked Jennifer to contribute to an article on old fashioned ways to manage your money, Six money-saving tips your grandma used that are way more effective than any budgeting app. Read article. Jennifer contributed to an article on Business Insider, This is the best way to do your taxes online - according to experts. Read article. CNN Money's Money Moves featured Jennifer in an article on how to strike the right balance between retiring early and saving enough. Read article. Jennifer contributed to a CNN Money article When is the Right Time to See a Financial Advisor? Read article.

Compass Planning News

Compass Planning continues to meet with clients as well as those interested in learning more about the firm via phone and web-based video conferencing. Email [email protected] to learn more. Compass Planning has become a supporter of The Center for Financial Planning at the sustainer level. The CFP Board created the center to achieve a more diverse and sustainable financial planning profession so that every American has access to competent and ethical financial planning advice. Compass Planning is a sponsor for this year's YW Boston's 2020 Elevating Lives Series. YW Boston’s Elevating Lives Series is a curated event series that focuses on areas relating to the YW Boston's mission of eliminating racism and empowering women. The series convenes thought leaders from across sectors for transformative discussions that help elevate lives. AdvisoryHQ named Compass Planning as one of the ten best Boston financial advisors. (Disclosures)

Compass Planning Associates helps families, individuals, and small-business clients achieve financial security, knowledge, and control over their money. Our fee-only, client-centered approach provides education and guidance for achieving financial goals and dreams.   This newsletter and any linked references are for informational purposes only and are not to be construed as tax, legal, or investment advice. Compass Planning has gathered the information from sources it believes are reliable, but your individual situation can vary, and you should consult with your investment, accounting, and/or tax professional before taking any action.