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Submitted by: Amy Rose Herrick
Amy's skills combine Tax Planning, Income structuring, Cash Flow, Divorce Settlements, Debt configuration, Estate Plans, Portfolio Planning and Distribution Alternatives. She assisted an institutional investor base from '86-90, then focused her practice in '91 to the present for individuals and small business exclusively. Amy holds various professional licensing in several states. She has provided planning advice to multiple media outlets including Newsweek. Interviews are available.
At some point, you decided to save money for retirement or something else. You filled out the forms, selected some investment options, and now you routinely toss the statements in the drawer after a quick glance making a mental note of whether it has grown or lost value since the last time you looked, mostly by memory.
You have left your payroll savings deductions unchanged for years after the one and only time you looked at the list of options.
Maybe you have five little accounts out there from five different years you deposited money to save a few dollars in taxes by using an IRA. A few more accounts were added over the years when you changed employers and opened new plans each job change. Some you never rolled out of the old plan. It is just too much to keep track of anymore. Now, most quarters you don’t even open the statements and look. You could easily double the amount of statements if you are married.
If you have not spoken to an investment professional since you opened some or all of the accounts, who knows what the performance has really been compared to your expectations, or where they are headed now.
One thing often overlooked is what inflation means to your situation. The fact is if an inflation rate over time is 4.5% on average, every year, you need to earn net this figure just to keep your buying power about even. Earnings above this are the basis for your future lifestyle, or savings needs. Think about it. Every year if you are not earning at least 4.5%+ on your retirement funds on average, you lost your future buying power. A low yielding or declining investment could be costing you dearly years from now from inaction today.
What do you do about it? Gather up all the statements and visit with a trained investment professional. Let him or her review all your holdings, determine your risk tolerance, investigate your available investment options and develop a strategy to maximize your results with regular account reviews, and ongoing investment account management.
If you had a pressing medical issue, it is not uncommon to speak with two or three physicians for a “diagnosis and treatment plan”. It may be past time to have a routine physical performed by an investment professional to diagnose and treat your investments!
Not sure you’re comfortable with the advice given by the first professional you contact? Take the same materials to professional number two, or three to find the best fit for your situation. Do not show any professional the other professional’s results and recommendations. Let them develop recommendations on their own merit and compare results to find the best fit for you. This should be a long term relationship of trust and performance with regular contact, and monitoring so finding a good fit in the beginning is essential to your success.
If your planning professional ceases to be a good fit in the future, find another qualified professional quickly if the issues causing the communication problems cannot be resolved to your satisfaction within a reasonable time frame, or ask them for a referral to a competent colleague.
Thereafter, monitor your account allocations and performance at least annually. Semi-annually or quarterly would be even better for some holdings. In some cases, monthly reviews may be prudent if you are a very aggressive investor with holdings that could swing violently in value that may need reallocated more frequently.
Most investors would be better served to have all their accounts under one Independent Advisor who can examine the entire portfolio contents and coordinate holdings as necessary. The other alternative of trying to do each individiual account managment with whom ever is listed on the statement in most cases will tend to have haphazard results and be very time consuming.
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