December 20, 2006
By seadmin

As 2007 quickly approaches, I want you to take a step back and ask yourself a few important questions about your money.

The purpose of this monetary self examination is to get you focused on the specific actions you should be taking to help you achieve your financial goals in the year ahead. These are actions you may have overlooked in 2006 and maybe they are things you weren’t even aware you should be doing.

Whatever your personal situation, everyone should start the year off by honestly answering the following five questions:

1. Am I saving all I can for my retirement?

You know I am always telling you to maximize your retirement savings accounts, but are you really doing so? I feel that a good, achievable target is to save 15% of what you make. And, if you earn big money, say over $150,000 per year, your retirement savings goal should be about 20%.

2. Are my assets at the right company?

As we enter a new year, maybe you should be moving money out of a mutual fund or bank and getting it into a discount brokerage account that allows you to buy exchange-traded funds (ETFs). You should also look for a brokerage firm that charges you low transaction fees.

3. Do I have any retirement accounts left at a previous employer?

I know it’s tempting to just leave your 401(k) with your former employer and avoid the hassle of rolling it over into an IRA, but by avoiding a little paperwork you could be short-circuiting your performance objectives. Make sure you get yourself out of any old 401(k) or other retirement accounts you currently hold.

4. Am I taking advantage of the opportunities in sector ETFs?

Investing in stocks is not just about buying the Dow or S&P 500. In 2007, the biggest opportunities will be found in sector ETFs. Some will even be found on the other side of the globe. The only way to insure you aren’t missing out on any of the abundant profit opportunities is to make sure you put some of your money into the best sectors available.

5. Should I continue to hold every position in my portfolio?

Nothing lasts forever but the earth and sky, as the song says, and that includes your investment holdings. What worked in 2006 may not work in 2007 and that’s why it is important to review every holding in your portfolio. If it ain’t broke, don’t fix it. But if it is broke, or if that holding is causing you some financial pain, get rid of it and move your money into a sector that is performing well. Don’t be afraid to act in defense of your own money. The only person who suffers from your inaction is you.

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