New Year’s Investing Resolutions

Well it’s that time of year again. That moment when we promise to start afresh and finally do the things we ought to do.

Grab that momentum/optimism/guilt and start your financial year on good footing.

To help, we reached out to some of the experts who’ve shared their insights with Portfolioist in 2010 and asked them a simple question: What would be the very best New Year’s resolution an investor could make moving into 2011?

Here’s their advice:

Manisha Thakor, expert on women and money, author, educator:

With bond rates so low and a federal and state budget crisis looming in the wings – fixed income will likely not be the safe haven it’s been in recent years. The new year is a great time to take a look at the quality, maturity, and duration of your fixed income holdings and assess whether or not alternatives such as utility stocks or dividend aristocrats make sense as a fixed income proxy. The investor’s worst nightmare is a “black swan” (or unanticipated event) leaving them in liquidity crunch. With so many municipalities under duress it is not inconceivable that some municipal money market funds could “break the buck.” Given the low yield differentials between municipals and treasuries, early 2011 is a great time for investors to reassess whether their “safe investments” are as safe as you want them to be.

(More from Manisha: Women Can Invest Smarter)

Mike Piper, author, blogger at Oblivious Investor

My answer depends on what stage the investor is in.

  • New investor: Max out your Roth IRA (or 401k match, if you have an employer that offers one). At this stage, how much you invest is far more important than how you invest.
  • Investor in the middle of working years: Continue to save money, of course. But make a resolution to sit down and make sure your money is invested properly. Check your asset allocation to make sure it fits your goals and needs, and look for ways to reduce the costs of your investments.
  • Investor nearing retirement: Calculate exactly how much income you’ll need from your portfolio each year during retirement. That’s the first step of retirement planning.
  • Investor in retirement: Enjoy the fruits of your years of saving. 🙂

(More from Mike: Can I Retire?)

Larry Swedroe, author, Principal and Director of Research at Buckingham Asset Management

If you don’t have a financial plan, the very first thing you should do is write one and sign it. The financial plan should include not only an investment plan, but an estate plan as well. If you have a plan, make sure you review it annually to make sure it is up to date. Make sure the beneficiaries on your IRA’s, ROTH IRAs, 401(k)s, life insurance and annuities are all correct and reviewed with your estate attorney.  And make sure all financial accounts are properly titled (if you have a trust make sure the assets you want in the trust are titled correctly). (Update: Larry  offers this plus 15 more in his column 16 Financial Resolutions for the New Year.)

(More from Larry: On Passive Investing and Skill, Your Fund Manger is No Albert Pujols)

Carl Richards, blogger, artist, founder Prasada Capital Management

To carefully consider the behavioral mistakes you have made in the past (have you bought high and sold low…over and over?) and find a way to not repeat them in the upcoming year.

(More from Carl: Conquering Investment Mistakes and Learning to Talk About Money, Investing, Emotion and Simplicity)


So what’s your investing New Year’s Resolution?

Please share below and stop by tomorrow, when we’ll put the same questions to the authors of The Boglehead’s Guide to Investing.

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