The beginning of a new year is as good a time as any to untangle your investments.
If you’re like most people, it’s easy to get overwhelmed.
It’s not too different from the challenges in organizing your time, your email, your closets, your garage. Too much clutter!
In the case of your investments, you may…
1. Own too many – when you may be nicely diversified with just a small number of funds instead.
2. Have them spread across too many accounts – making it hard to know what you own, why you own it, and how to manage it.
3. Dwell too much on the past – even though most of the time it’s not likely to be repeated or it’s irrelevant.
4. Think too hard about when to invest – even though you may be better off setting up a schedule and going on auto-pilot.
5. React too quickly to media “noise” – even though most experts and talking heads really don’t know what’s going to happen.
6. Make too many changes – even though odds may be you’d be better off doing nothing.
In the coming weeks, I’ll expand on each of these, including my own challenges. And I’ll try to do so without jargon – especially since in recently explaining an investing concept to my wife, she responded “Not only do I not understand what you just said, I don’t know the meaning of half the words you said.”