Add These 6 Investment Moves to Your New Year’s Resolutions List

Dan Pascone |

The start of a new year is a great time to step back from the day-to-day and resolve to make positive changes that can improve your quality of life. While most resolutions focus on improving physical or emotional health, it’s just as important to nurture your financial health.

As we start 2024, consider these 6 investment-related moves that can keep your finances healthy and on track.  

  1. Revisit your financial plan. If you’ve taken the time to develop a customized financial plan, you have a solid roadmap that can help you achieve your most important life goals. But as with any plan, it shouldn’t be a static document. Be sure to revisit your financial plan periodically, and especially after major life changes (e.g., marriage, divorce, new job, or new baby). A financial planner can talk through what’s changed, adjust the plan, and model different scenarios and decisions so you can see how they’ll impact your finances. If you don’t have a financial plan in place, the new year is an ideal time to create one.
  2. Check your asset allocation. Different types of assets suit different goals, bring different levels of risk, and tend to perform differently from each other. That’s why it’s important to allocate your investment portfolio across different asset types, such as equities (stocks and stock funds), fixed income (bonds and bond funds), and cash, at a minimum. There’s no single best mix of assets; the right allocation depends on your goals, risk tolerance, and investing time horizon. A professional financial planner can recommend an asset allocation that’s best suited to your specific situation.   
  3. Consider rebalancing your portfolio. Setting an asset allocation isn’t a once-and-done proposition. Over time your allocation will drift naturally as the market and other economic conditions ebb and flow—with some assets performing very well and others lagging. For example, bonds experienced one of their worst years in 2022, so fixed income assets might now make up a smaller percentage of your portfolio than you intend. When your asset allocation drifts, you can end up with a portfolio that is either riskier or more conservative than you planned. Rebalancing your portfolio periodically avoids that risk and gets you back on track. And the start of a new year is the perfect time to talk with your financial planner about reviewing and rebalancing your portfolio as needed.
  4. Review your retirement investments. You probably have a rough idea of when you’d like to finish your last day at work and start living the retired life you’ve imagined. Getting there takes more than just envisioning, though; it takes a solid retirement plan. And just like your overall plan should be dynamic, your retirement investments should be, too. Now is a good time to review all the ways you’re investing for retirement. Are you employing the three-bucket strategy—spreading your retirement assets across taxable, tax-deferred, and tax-free accounts? Have you considered whether it makes sense to convert portions of a traditional 401k or IRA to a Roth? How will taxes impact your investments, and should you make any adjustments to minimize your tax liability now and in retirement? These are just some of the retirement investment questions a financial planner can discuss with you, to ensure you’re tracking toward your next chapter of life.     
  5. Assess your equity compensation. If your current package includes equity compensation—like stock options, restricted stock units, or an employee stock ownership plan—you have a nice perk that can help you build wealth. But equity compensation involves complicated tax implications and even creates some risk. A financial planner can review your equity compensation and help you leverage these opportunities in a way that minimizes your tax liability and keeps your portfolio in balance.
  6. Consider tax loss harvesting. Depending on how you’re invested, you might have made a lot of capital gains over the past year. But it’s possible you experienced some losses, too. While investment losses are never welcome, you can use them to generate tax savings through tax-loss harvesting. It’s a complicated approach, but essentially it involves selling a poor-performing investment at a loss, using the loss to offset gains from other investments, and reinvesting the money from the sale in a different investment. If you didn’t harvest losses before year-end, think about doing it now in preparation for the 2024 tax year. An experienced financial planner can help you navigate the complexities and ensure you do it correctly, in accordance with tax laws.