NewburyportNews.com, Newburyport, MA

Business

December 10, 2013

Missing opportunities for your future?

Nothing feels worse than sitting on the sidelines and thinking everybody else is gaining on you. The news keeps coming in: The markets are doing well and the future’s looking brighter.

Before you jump into the stock market or before you even think about dialing up your exposure to stocks, pause and ask yourself: “What is driving my appetite for greater return?”

Make sure it isn’t your neighbors, friends, family and co-workers who make you feel you’ve missed the boat. Make sure the media hype isn’t influencing your thinking.

If you have not recently stepped back far enough from the daily noise to assess clearly what your investment objectives are and the purpose of your investments long term, then this time in December and early January would be excellent for you to ask and answer a couple of questions: What purpose do my investments serve? What are my financial objectives, long term and short term? Am I on course to meeting my objectives?

If you can answer these questions clearly for yourself and your family, you may be in the ideal position of ignoring the financial noise in today’s media altogether. Once you’ve articulated your goals, preferably written them down, you have taken the first and soundest step toward financial peace of mind.

Now you have to determine whether you are implementing the steps necessary to meet those goals. Usually you then have to answer questions such as these: Am I saving enough? Am I saving enough in the right kind of account, a tax-deferred 401(k) or a taxable brokerage account? And then, are my investments exposed to stocks and bonds in proportions aligned with my goals and my tolerance for volatility?

This last question is not easily answered and its answer can vary with market conditions, your age, and the closeness of reaching your goals. What’s important here in your considering the weight you have in stocks relative to the weight you have in bonds should NOT be driven by market activity. The answer to determining where you should be cannot be found in the market, in the media or at the water cooler.

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