Episode Details

What to Do With Your Money at the End of the Year

By Douglas Goldstein, CFP®

As the fiscal year draws to a close, it’s time to review your financial plan. Here are three important aspects that you need to look at:

Savings goals

What are your long-term and short-term goals? Are they the same as they were last year? If your goals are both time and dollar specific, it’s easy to tell whether you are on target to meeting them. Take a look at your pension plan. Is the division of funds among its saving and insurance component still relevant to your current stage in life?

Asset allocation

Apart from saving your money, you also need to grow it. So let’s look at your investments. Are your funds properly invested? Your investments should reflect your risk tolerance, growth objective, and time frame. Recheck your asset allocation to ensure that everything is in order following the movements of the markets over the past year. Often funds can change focus, requiring you to rebalance your portfolio. Furthermore, if a stock or other security does extremely well (or extremely poorly), this can also affect the balance of a portfolio. It may be time to buy/sell.

Review Your Winners and Losers

Before selling weak stocks/funds and actualizing profits, discuss the potential tax ramifications of the sale with your accountant. Depending on your situation, it may be wise to hold onto investments for at least one whole calendar year to qualify for the long-term capital gains rate (if you are a U.S. tax payer). While tax ramifications shouldn’t be the only factor in determining when to sell, they should certainly be taken into consideration.

Don’t let the end of the year pass you by. Call your financial advisor for an appointment today to review your financial plan. Make sure your finances are in the best shape to enable you to realize your dreams.

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing is available at www.richasaking.com. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. Securities offered through Portfolio Resources Group, Inc., Member FINRA, SIPC, MSRB, SIFMA, FSI. Accounts carried by Pershing LLC., Member NYSE/SIPC, a subsidiary of The Bank of New York Mellon Corporation. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates.