BOSTON (CBS) – Number 3 on Fidelity’s list is to Invest more. Stands to reason if you can save more you will now have the cash to invest more.
#3 Invest More
Folks often make big mistakes in the market by selling when the market is down and buying when it is high.
We so often allow our emotions to influence our decisions. It is very unsettling to watch your 401(k) portfolio lose money. This is your future you say to yourself and you will need those dollars in the future. So, you put in a sell order but when do you get back into the market?
Review your asset allocation. Are you too conservative and when the market had a run up after the election last fall were you left out? Or worse, are you too aggressive and put all your money into Bio Tech because it did so well for your brother-in-law but it’s not doing so well for you? A diversified portfolio that’s suited to your investing goals is essential here.
A Fidelity suggestion for those who are not financial savvy is to consider a target date fund. These are appropriate for your 401(k) plan and IRA. The fund manager selects and adjusts the asset allocation to match a target retirement date.
#4 Pay Down Debt
Most of us owe on a variety of debt; mortgages, student loans, car loans and credit-card balances. Those fixed monthly payments take a big bite out of your income.
Your credit card is discretionary debt. The key is to pay off your balance each month. If you are carrying debt month-to-month look to pay down the credit card with the highest interest rate first. Pay more than the minimum each month.
Check your credit card statement to see how long it will take you to pay off the balance—and how much it will cost. The statement usually suggests how much you need to pay each month to pay it off completely. Check out Bankrate.com’s calculator on accelerating your debt pay off.
You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.
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