2022 is off and running, and there is a trend to some of the topics that have come up with my clients and I. Let’s take a few minutes to review some of these things – things that you can be doing right now, from a financial perspective.

Rebalance Your Portfolio. Clients working with me probably know that we regularly review portfolios and adjust as needed. If you are not working with me (yet) I hope you have done the same.

But if it’s been a while since you’ve touched your portfolio, you may find some of your strongly performing assets have now overshot their target allocations. Depending on costs and tax ramifications, you may want to sell some of your winning asset classes and buy recently underperforming ones. It may feel counterintuitive to sell “winners” and buy “losers,” but not if you recognize you’re selling high and buying low. Not to mention, making strategic tax-harvesting moves can help greatly on next year’s tax return!

Double Down on Your Planning. When we endure turbulent markets, it’s more important than ever to have a plan in place which effectively guides your investment portfolio. So now is a great time to freshen up your old plan or create one if you never had one.

Have any of your personal goals changed, or will they soon? How might this impact your investment mix? Have market conditions put your portfolio ahead of or behind schedule? Are you unsure where you stand to begin with? It’s time well-spent to periodically ensure your plan remains relevant to you and your personal circumstances.

Set up a password manager. Many of the people I am talking to have thought about this, but haven’t yet pulled the trigger. Using a password manager to generate and secure strong passwords for your financial accounts is a widely accepted best practice. And yet, surveys suggest few investors have installed a password manager as recommended. Consider an important line of defense against hackers and cyber theft. Use it to help protect your financial house.

I can personally speak for how helpful this has been to me and my family. After keeping a spreadsheet for years with hundreds of passwords and credentials, I started using LastPass and have not regretted it! It’s so easy now to pre-populate all of my passwords effortlessly, as well as have it generate complex passcodes and store them all in real-time!

Revisit your tax situation. Although the Tax Cuts and Jobs Act (TCJA) is now in full swing, you’re probably still following a few well-worn tax-planning paths that may no longer apply. You (with your tax planner) may want to revisit them now that we are in “tax season”. For example:

• Holding a mortgage is much less likely to offer the tax-deductible advantages it used to. Have you altered your payment plans accordingly?
• Ditto on charitable contributions. Have you looked at creative new strategies, like establishing a Donor Advised Fund, to continue engaging in tax-favored giving?
• Unless Congress acts to extend them, TCJA’s lower individual income tax rates will expire in 2026. Have you considered how the current, lower-rate environment might impact your retirement planning? For example, performing a Roth IRA conversion with after-tax dollars may make more sense today than it used to.

Live a Little. You may recall, that prior to 2022’s jittery geopolitical headlines, portfolios have had outstanding years prior. At the time of this writing (mid-March 2022), we’ve given back some of those earnings. But all-in-all we should all be pretty well higher than where we were 1, 5, 10 years ago.

If so, you’ll be inspired by Benjamin Franklin’s sentiment from his 1736 Poor Richard’s Almanack: “Wealth is not his that has it, but his that enjoys it.” So if you’ve been consistently making money and meeting your savings goals, consider treating yourself to a reward. A vacation. A nice dinner out. Some new clothes. Whatever it is – you’ve probably earned it.

And I’ve got a bonus “financial best practice” to add to the list:

Above all else, remember what your money is for.

Money is meant to fund your moments of meaning.

So, be it resolved for the year ahead: Next time you find your stomach tightening at the latest frightening or exciting financial news, tune it out. Walk away. Go do something you love, with those whose company you cherish. Circling back to our first call to inaction, not only will this feel better, but it’s also likely to be better for your financial well-being.

At TrustTree Financial, we’d love to help you do any of the above. Every day we’ve helped families convert their dreams into plans, and their plans into achievements. Stay in touch throughout the year, so we can do the same for you. 

Brandon