The end of the year is a good time for looking back. What were our successes and what were our failures? Did we keep our resolutions? Where do we want to improve?
As the end-of-year statements arrive, it's also a good time review our finances. How did our portfolios perform? Did they meet our expectations? Are we disappointed or satisfied? How did global events affect our investments?
Jill Schlesinger, business analyst for CBS News has posted a good review of the 2014 financial markets. Like most years, 2014 was a bit of a mixed bag investment wise. US stocks were on a roller coaster ride, but ended mostly up for the year. International stocks didn’t do quite as well, especially in emerging markets. And the 40% drop in oil over the last 6 months really hurt both commodities and energy investments.
For 2015, the US economy is looking stronger in some aspects – home prices and employment rates are improving. Consumer spending is up, mostly because gas prices are lower, which gives people more money in their pockets each week. But there are headwinds as well – lower global growth projections which will hurt our exports, continued stagnation in wages, political deadlock and growing economic inequality.
Hard to say what will happen with investments at any given time, which is why I recommend a diversified portfolio customized to your goals and tailored to your tolerance for fluctuation in values.
Everyone has their opinion about what the new year will bring for investments and these opinions will be featured on magazine covers, news sites and social media, but no one has a crystal ball.
The end of the year is a good time to review your investment strategy and adjust your allocation if it has moved away from your target. But it's more important to review your goals - why are you saving and investing in the first place? Whether it's to provide a college education for your children or for your own living expenses in retirement, keep your focus long term and be sure you are saving enough to give yourself the best chance of meeting your goals. It's also a good time to review other key financial elements such as insurance and estate planning. This article has more tips for you to consider.
If you're uncertain whether or not you are on target to meet your goals, now is a good time to schedule a meeting with your financial adviser. At Pathway Financial Services, we'll be reaching out to all of our clients in January to review their progress towards their goals and remind them of the next steps they can take to get on track.
Wishing you and yours a safe and prosperous New Year!