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Its the end of the year, so you have had almost a full 12 months to analyze your investment performance for the year.  This is a great time to see what aspects of your investment plan worked or to create an investment plan if you do not have one.  One of the most important things you can do as an investor is to understand your performance; for each account,  for each investment class (i.e. stocks, bonds, cash equivalents), and for individual investments.

Performance
You may or may not have payed attention to the performance of your investments during the year, either way an end of the year check is needed.  Several things can affect the performance of an investment including;  company performance related to analyst opinions, changing interest rates, and also the fees associated with certain investments.  By looking at the performance of your individual investments you can see which of your investment choices are worth keeping and which may need to be removed from your portfolio.  By looking at investment performance on an account level you will be able to see where there may be a need to evaluate your investment plan due to results different than what was anticipated.

Risk Tolerance
The end of the year is a great time to see if your risk tolerance has changed.  If your risk tolerance is different you will need to analyze your investments to make sure they are acceptable given your new tolerance for risk.  

Investment Plan
Ask yourself if you have a true investment plan.  If you do have an investment plan how is it working for you?  If you do not have an investment plan consider getting one before years end.  The stock market, and investing as a whole is not something you just want to put money into with no plan, unless you are ok losing your funds.  Your investment plan should consider things like: which accounts to have, what amount of funds should be contributed, and what investments are suitable.  After getting an investment plan remember it is good to periodically evaluate if it is working for you.

Research
Taking the time to do research will make you a better investor.  So many things happen in the stock market that can affect the value of your investments, so great research will help you understand the changes in your portfolio.  Many investors pick assets for the wrong reasons, and do poorly, research can help.  Whether hoping to analyze an individual stock, understand how mutual funds work or become an options trader, tons of resources are available.  

Using Account Features
Your broker (place where you invest) may have a ton of account features which can simplify your investing.  One feature, automatic contributions allows you to send funds to your accounts so you do not have to worry about forgetting.  Automatic investments will actually place a set amount of funds in a preselected investment.  A watchlist  will allow you to get alerts from the investments you follow when certain conditions are met (like a specific price being reached).  Check with your broker to see what account features are offered and which ones may be beneficial to you.

Getting Help
Everyone could use help investing, the question is how much.  For a self-directed investor help may just be showing them which tools are available.  For other investors help could include assistance with tools, research or an investment plan.  Consider whether or not you need help, and seek it if you do.  In addition to fee based help, some brokers offer free investment planning.  Even outside of talking to your broker, chances are pretty good that you know someone who is great at investing.

 


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