By Xavier Brenner Smart investors spend a lot of time valuing stocks, divining big macroeconomic trends and looking for fresh and innovative strategies that hold up to analytical rigor. However, getting the basics right matters, too. And you'd be surprised how many investors trip up over the simple stuff. So, as 2014 draws to an end, here are five resolutions for 2015 worth considering.
Truth Test your Portfolio
Take a hard look at your portfolio performance, financial adviser's strategy and individual holdings. Did the portfolio outperform and with a tolerable level of risk? If not, why not? Some portfolio's lag the broader market because a handful of investments fell out of favor. Sometimes, this is only a temporary speed bump if those depressed holdings still have solid fundamentals driving them. Other times, the problems run deeper and point to the need for a serious rethink about investment goals, strategies and risk appetite. Does the asset allocation in your portfolio still make sense given the economic facts on the ground? Does your adviser have a workable game plan for improvement? Is it time to make a change
Some 41% to 43% percent of U.S. households may not have enough set aside to fund their retirement, according to the Employment Benefit Research Institute’s Retirement Readiness Ratings. So if you can afford to make the maximum contribution to your 401(k) plan this year, do so. You can save on a pre-tax basis and employers often match a certain percentage of your contributions. Starting on January 1, employees will be able to contribute up to $18,000 annually to their 401(k) plans.
Saving consistently takes a certain amount of discipline and not everyone is able to put aside cash for retirement once the paycheck hits your bank account.