JULY: 3 Things To Do This Month To Help Keep Your Financial Life On Track

Like maintaining a healthy lifestyle, maintaining a healthy financial life requires ongoing maintenance. It’s much easier to stay on track if you break the necessary tasks down into smaller more manageable tasks. So, here are three quick personal finance tips to help you stay on track this month:

TIP #1

Run a Retirement Plan Projection

Run a retirement plan projection so that you know where you are and what you need to do to get closer to your goals. You should do this once a year to see if you are heading in the right direction. For a quick calculation of what you need to be saving for retirement you can use this calculator at CNNMoney. If you need a more thorough calculation you should consider work with a CERTIFIED FINANCIAL PLANNER™ (CFP®). They’ll have access to more sophisticated software and will look at your entire financial life. If you are already working with a CERTIFIED FINANCIAL PLANNER™ (CFP®) you will want to revisit their projections at your annual review to account for changes in your finances.

TIP #2

Increase Your 401(k) Plan Contributions

For most people, setting a goal to max out your 401(k) or 403(b) plan contributions should be key. At minimum, shoot for at least contributing enough to get your company match. If you’re saving in a 401(k) or 403(b) and aren’t already on track to max it out, increase your contributions by 1%. Re-evaluate in 6 months and increase your contributions by another 1% until you ultimately max it out.

TIP #3

Review Your Investment Strategy

Has anything changed over the last 6 months that would cause you to have to make changes? Births? deaths? New goals? If so, review your plan or speak to your CERTIFIED FINANCIAL PLANNER™ (CFP®) to help you make smart choices.


  1. http://www.learnvest.com/knowledge-center/your-january-2016-financial-to-dos/
  2. http://money.usnews.com/money/personal-finance/articles/2014/12/02/your-end-of-year-financial-checklist
  3. http://www.forbes.com/sites/learnvest/2013/01/04/your-financial-to-dos-for-every-month-in-2013/#14fe6d3d41d4

Why Portfolio Diversification Is Important During Volatile Markets

We all seem to know a day trader or two: someone constantly hunting for the next hot stock. That’s not what I’d consider smart investing. Here’s why it’s wise to diversify your portfolio:

Diversification Helps You Manage Risk

We all want a terrific ROI, but risk management matters just as much in investing, perhaps more. That is why diversification is so important. There are two great reasons to invest across a range of asset classes, even when some are clearly outperforming others.


Potentially Capture Gains in Different Market Climates

If you allocate your invested assets across the breadth of asset classes, you will at least have some percentage of your portfolio assigned to the market’s best-performing sectors on any given trading day. If your portfolio is too heavily weighted in one asset class, or in one stock, its return is riding too heavily on its performance.

Your portfolio is like a garden. A good gardener will plant a variety of flowers to ensure something is always blooming. The gardener knows that some flowers eventually die off or may not grow well but if there is enough diversity the overall picture will still look good.


Potentially Less Financial Pain if Stocks Tank

If you have a lot of money in growth stocks and aggressive growth funds (and some people do), what happens to your portfolio in a correction or a bear market? You’ve got a bunch of losers on your hands. Tax loss harvesting can ease the pain only so much.

Diversification gives your portfolio a kind of “buffer” against market volatility and drawdowns. Without it, your exposure to risk is magnified.


Don’t put all your eggs in one basket!

Believe the cliché: don’t put all your eggs in one basket. Wall Street is hardly uneventful and the behavior of the market sometimes leaves even seasoned analysts scratching their heads. We can’t predict how the market will perform; we can diversify to address the challenges presented by its ups and downs.


  1. usatoday30.usatoday.com/money/perfi/retirement/story/2011-12-08/investment-diversification/51749298/1
  2. This material was prepared, in part, by MarketingPro, Inc.