End of Year is the Perfect Time to Review Your Investment Plan, Says SEC and FINRA
The SEC's Office of Investor Education and Advocacy and the Financial
Industry Regulatory Authority (FINRA) have released a joint investor alert
advising investors to review their investment plans and portfolios prior
to the year’s end.
The alert outlines five key focus areas, which regulators say investors
should consider during any review.
"The end of the year is a reasonable time to review your overall investment
portfolio and evaluate your existing
," stated FINRA and the SEC. "By including asset categories whose
investment returns move up and down under different market conditions,
you might be able to better protect your overall investment portfolio
from significant losses or price swings."
Some investments grow faster than others, and the resulting changes can
cause your portfolio to drift away from your desired asset allocation
mix. Rebalancing enables you to adjust your investment portfolio to ensure
you aren’t overemphasizing one or more asset categories. For
tips on how to rebalance, read the full investor alert here
"As you review your investment portfolio at the end of the year, it
is natural to consider your investment planning for the year ahead,"
wrote the regulators in the alert. "If you are considering selling
securities, it may be worthwhile to weigh the potential effects of current
tax rates on your investments, including whether selling your securities
will trigger capital gains or other taxes."
The SEC and FINRA recommend investors consult their tax advisors or visit
the IRS website to learn more about how tax rates, including any potential
legislative changes, could impact their finances.
Checking the background of a broker or investment advisor before trusting
him or her with your money is a key step in avoiding investment fraud.
Research the professional and his/her firm using free online tools, such
as FINRA’s BrokerCheck or
the Investment Adviser Public Disclosure (IAPD)
FINRA and the SEC recommend you place all of your important financial documents
in a safe place where your trusted family members can find them in the
event of an emergency. "Consider preparing a list identifying these
records, including a list of financial accounts and all user names and
passwords, and their location," advises the alert.
tips on how to review your investments and accounts on a regular basis,
"The end of the year is a great time to take stock of your financial
situation and make sure your investment plan is meeting your needs,"
said Gerri Walsh, FINRA's Vice President for Investor Education. "Taking
some time to carefully manage your investment portfolio can pay dividends
in the coming year."
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