Whether your bank and investment accounts have grown or been a bit depleted recently, there are a few steps you can take to help ensure that you're on the right path for 2009 and beyond.
Getting the Full Picture
Stephen Peluso, CFP, wealth management specialist with Morgan Keegan & Co., recommends getting an annual financial evaluation, beginning with a review of all dollars being earned and spent.
"Assess the current status of all your assets, liabilities, income, and expenses—everything you need to get the complete picture," says Peluso. "You can then incorporate it into the context of your personal goals and time horizons."
A 30-year-old in the middle of a career will likely have different needs, goals and time horizons than will a 60-year-old executive contemplating retirement. According to Peluso, individuals who have longer time horizons can make some basic assumptions, such as assuming inflation will occur and the markets will eventually resume on a more normal course.
Given the current status of the markets, it might be necessary for some individuals to revisit certain goals. For example, an individual thinking about retirement may need to continue to work for a few more years. Likewise, higher education goals may need to be modified if a family's resources have been reduced.
Another important aspect of financial security is diversity in your portfolio. "If you have available funds, right now may be a great time to develop an investment policy with your financial advisor and begin investing in the markets," says Peluso. "But if you have a shorter time horizon, say one to three years, having more accessible funds might also be a good idea."
To Do List
The end of the year is a good time to make an appointment with your financial advisor to review your investments.
"Meeting with your financial advisor helps you have an understanding of where your funds are and if changes should be made," says Peluso. "It's also a good time to review your estate planning documents and insurance policies to ensure that everything is up to date." This is also a good time to evaluate your budget and see if you have any unnecessary "money leaks."
The Outlook
Most economists predict a recession that will last at least through the first half of 2009.
"We've experienced a decline in the United States economy in the third quarter and it will likely continue through next year," says Allsbrook. "I expect that we'll start to see some growth by the fourth quarter of 2009—when borrowing grows, we'll know that the economy is picking up again."
Looking to start 2009 off right? Consider meeting with a Morgan Keegan financial advisor to discuss your investments and your plans moving forward. Call 866-951-9511.
Investment services are provided by Morgan Keegan & Company, a subsidiary of Regions Financial Corporation and a member of the FINRA and SIPC. Securities and insurance products offered through Morgan Keegan are not FDIC-insured, not a deposit, may go down in value, not bank guaranteed, and not insured by any Federal Government Agency.