With 2021 coming to a close and a new year just around the corner, investors should embrace a few resolutions to get the most out of their portfolios in 2022.
Although it may be easy to break most unrealistic resolutions, it will be something you will not regret sticking to when you fix your finances early and adjust your planning for the rest of the year. In this post, we propose some resolutions to keep your investments in check, which are super easy to maintain.
The start of a new year is always a great time to create a financial plan for the year that has just ended and the new year ahead of you. You can look back on what you have achieved financially in the last year and look forward to how you can build on your wealth in the coming year.
This plan will help you decide which resolutions can help you achieve your financial goals for 2022.
Look to pay fewer investment fees
Fees can make a huge dent in your wealth-building, minimising your investment income over time. You have options to limit what you pay in fees. First, you could rethink your investment options. You could invest heavily in managed mutual funds instead of exchange-traded funds (ETFs) or index funds. You could reconsider this strategy.
Look to expand your portfolio
Diversification is of the utmost importance when protecting your investments from a volatile market. It is incredibly risky to focus your investment portfolio on one asset class. If that market or sector has a downturn, you could lose everything. If you think your portfolio lacks diversification, you can talk to one of our partners about how to add variety to diversify your portfolio. This should be a top priority.
Regularly rebalance your portfolio
Regularly rebalancing your portfolio allows you to maintain the right asset allocation to achieve your investment goals. All too often, investors fail to take a practical approach to manage their investments and leave their portfolios unattended for long periods.
If you have not recently given your investments the TLC they need, the New Year is a perfect opportunity to give your portfolio a once-over. If you usually rebalance once a year, think twice a year, or perhaps even remind yourself to do so quarterly.
Although it is important to remember that we never recommend becoming too obsessive about your portfolio, and never checking it weekly or even more regularly in some cases. This is due to the risk of overreacting to minor market changes. You should always keep your finger on the pulse of what is happening with your investments but never make rash decisions.
Review tax efficiency
Similar to management fees, taxes can drain your investment.
Regarding a taxable investment account, you must be mindful of not triggering capital gains tax. This tax applies when you sell an investment for more than what it cost when you purchased it. One way to minimise this tax is to make tax-efficient investments.
Our partners can help you explore your options further and learn how to save money when it comes to tax and investment.
Kickstart your investment resolutions before the new year. The hardest part of making any New Year’s resolutions is sticking to them. To ensure you stay on track, consider how these tips fit into your larger financial plan. Plan the management of your portfolio into your yearly calendar, and set some larger financial goals to which your investments can contribute.
Trust the experts!
Finding investing stressful? Consider finding a trusted investment expert. Our partners sweat the details while our clients sit back with confidence in the growth of their wealth.
GSB Capital can help you pick your investments, monitor the news, analyse market data, and, if necessary, make changes to keep it on track with your desired risk level. By trusting an expert, you can concentrate on your other New Year resolutions with peace of mind that your investments are in good hands. Contact our team today to start your investment journey. Please remember that the value of your investments can go down and rise, and you could get back less than you have invested.<
Ross Whatnall is CEO and co-founder of GSB and a highly experienced private client director. Ross holds many insurance and investment management qualifications, including CISI, CII, LIBF and CFA. He started his career in private banking with HSBC in the UK before moving to the UAE in 2013 to focus on serving his private clients.