As an investor, your circumstances and stages in life differs, irrespective of it, there checklist that should guide you as we move into the new year so that you can evaluate your profolio and decide what is best for you.
They include:
1. Check for Interest Rates:
If you have money in a bank, find the highest interest rate you can to protect you against inflation because money in the bank always depreciate in value. For instance, if you keep a million naira in the bank as 2020, as at 2022 the value of the 1million have been reduced to 400k if not less.
2. Review Your Emergency Fund:
Most investors have an emergency fund account because of unforseen circumstance, however it will be unwise to just leave it there. Instead, put it into work. A short-term bond fund will pay more than a money-market fund without much additional risk. If you think you probably won’t need this money for four or five years, consider using a fund that owns both stocks and bonds.
3. Check Your Asset Allocation:
As expected, you should have target allocations for big-company stock funds and small-company stock funds. Also, you must increase your investment target. It is wise you have a financial advisor, set up a meeting to evaluate your current allocation. The advisor can suggest any necessary changes where need be.
4. Rebalance your Investments:
Rebalancing your portfolio no doubts is very important because a lot have happen within the last 365 days because it will not only get you back on your investment goal tract but will help you take some profit and spread it to other promising stocks that have the capacity to grow in the next 3, 6 or 12 months.
5. Diversify:
Diversification is very important as it will help along the way. Just as you buy the best stocks with all the fundamental and technical analysis showing a promise of growth, you must also diversify into stocks that are defensive too. This will help you protect your funds against loss under any economic situation or change in policies. If you know what to do hear, you can ask your portfolio manager for assistance.
6. Determine Your Investment Policies:
Know your investment goals and stick to it irrespective of the circumstances because when the market is trying to manipulate your emotions, you should know what you are doing and why. Simply put, your investment policies keeps your emotions under check.
7. Set Measurable Goals and Planning:
Setting up an investment goal will help you see the true picture of everything, let’s say a retirement plan. That plan should specify a target year you want to retire and estimate how much retirement income you will need from your investments.
8. Look for more services you could render in exchange for funds that can be added into your portfolio which will go fat if done consistently.
Ambrose Omrdion
