Now that 2012 is drawing to a close, you may want to review the progress you’ve made this past year in many areas of your life — including your financial situation.
By going over your investment portfolio and other key areas related to your finances, you can learn what moves you may need to make in 2013 to stay on track toward your important objectives, such as college for your children, a comfortable retirement and the ability to leave the type of legacy you desire.
To get a clear picture of where you are, consider asking yourself these questions:
- Am I taking on too much risk? Although 2012 has generally been a pretty good year for investors, we’ve certainly seen periods of considerable volatility. During these times, did you find yourself constantly fretting about big drops in your portfolio value? In fact, have you consistently experienced this type of worry throughout your years as an investor? If so, you might be taking on too much risk for your individual risk tolerance. Review your holdings to determine if you can lower your risk level without jeopardizing your overall investment strategy.
Plus, your employer may match part of your contributions. So if you’ve been under-funding your retirement plan, ratchet up your funding in 2013. At the same time, you may still be eligible to contribute to an IRA; if so, try to “max out” on it. A traditional IRA grows tax deferred while a Roth IRA can grow tax free, provided you meet certain conditions.
Before the clock runs out on 2012, take the time to ask yourself the above questions. The answers may well spur you to take positive action in 2013.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.