Four Financial Resolutions for Your Investments in 2024

As another calendar year nears its end, it’s time to consider New Year's resolutions for 2024.  Financial resolutions are typically high on everyone’s list because they want to accomplish much in the next twelve months of their lives. 

According to a new poll from Experian, almost half of Americans (49%) want to increase their savings rates in 2024, while one-third (33%) want to focus on boosting their credit scores. Additionally, about 31% say they will create a personal budget. 

With this in mind, here are our top four financial resolutions for improving your financial well-being in 2024.

Financial Resolution #1: Review Your Investment Holdings 

One thing we know to be true is that everything about investing is subject to change. That’s because any uncertainty in the economy can impact the performance of the securities markets. And, since many economic indicators are unpredictable, it makes sense to balance your need for results with managing your exposure to investment risk.

In other words, having a “set-it-and-forget-it” strategy for investing in volatile markets could negatively impact your financial results if your static strategy is wrong. 

Your review should start with your asset allocation – the percentage of your assets you have invested in stocks, bonds, and other assets. Does this allocation fit current market conditions and your risk tolerance? Diversification should be your number one investment tactic for managing excessive risk. 

Consider working with a fiduciary fee-only financial advisor in Greenville, SC, who can help you balance your investments and risk.  

Financial Resolution #2: Develop an Asset Location Strategy for Tax Planning Purposes

While asset allocation strategies often dominate financial planning advice, an equally important tax planning strategy is asset location. This should be high on your list because minimizing taxes is a great way to improve your net returns.

Asset location can help reduce your tax liability over time. It involves looking at your various account types, such as 401k, traditional IRAs, Roth IRAs, and personal accounts, to determine which assets belong in which accounts to minimize your tax liability.

Here are three examples of how you can use an asset location strategy:

1. Place Tax-Efficient Investments in Taxable Accounts. For example, tax-exempt municipal bonds or appreciated stocks you have no intention of selling could be held in taxable accounts. This approach allows you to take advantage of lower capital gains rates and tax-exempt interest, effectively reducing the tax burden on these assets.
2. Hold Tax-Inefficient Assets in Tax-Advantaged Accounts: Investments that are not tax-efficient, such as high-yield bonds or real estate investment trusts (REITs), can be held in tax-deferred or tax-free accounts like traditional IRAs, Roth IRAs, or 401(k)s. One strategy allows you to defer taxes on appreciation and income until you withdraw the assets from the accounts. A Roth IRA strategy has tax-free growth inside the account and tax-free withdrawals. 
3. Strategic Withdrawals Based on Tax Implications: Utilize asset location to plan strategic withdrawals during retirement. By carefully selecting which accounts to withdraw from (taxable, tax-deferred, or tax-free), you can manage your tax bracket more effectively, potentially reducing your overall tax liabilities during retirement.

Financial Resolution #3: Stay Calm and Invest With Discipline!

Staying committed to your long-term investment strategy should be one of your financial resolutions going into 2024.

Getting caught up emotionally in the market’s short-term volatility is easy, but it pays to remember market movement up or down can be temporary. Plus, it is well known that prudent investing is a marathon and not a sprint. Some more disciplined investors even view short-term market declines as buying opportunities. For example, if you liked a stock at $100 per share, you may like it even more at $80 - assuming nothing else has changed. 

Making impulsive, emotion-driven financial decisions that respond to short-term market movements can be dangerous. All too often, these emotional choices are the exact opposite of what you should be doing. These emotional choices, driven by several indications, often lead to missed opportunities or unnecessary losses.

Remember, the key to successful investing is disciplined decision-making focusing on the long term. No one can predict short-term market movements with any consistency or accuracy.

Financial Resolution #4: Hiring the Right Financial Advisor

Think about this: whoever you hire to help you manage your financial future is one of the most important decisions you will make for yourself or your family. 

As you start the new year, consider four important variables:

• How did your portfolio's performance align with your expectations?
• Were the communication levels satisfactory?
• Did the risk exposure align with your comfort zone?
• Were there unexpected elements that caused discomfort?

Following are a few ways you can evaluate your current financial advisor relationship to make sure it’s on track and consistent with your financial goals:

1. Excessive fees are like excessive taxes; they will reduce the net performance of your assets. If your current advisor's fees seem consistently high compared to your results, it is time to explore alternatives.
2. It is time for a change if your advisor fails to keep you fully informed or address your concerns promptly.
3. Ensure your advisor's recommendations are based on your best interests and are not driven by commissions or other incentives that third parties pay financial advisors to sell their products.
4. As your financial goals evolve, your advisor should recommend changes that meet the new requirements. If your advisor’s recommendations do not match your current goals, perhaps it is time to consider a change.
5. If your financial situation becomes increasingly complex, you may need an advisor backed by an experienced team with specialized knowledge that fits your situation, circumstances, and goals.
6. Trust is fundamental in the financial advisor-client relationship. Those are valid reasons to explore other options if you have doubts about your advisor's integrity or willingness to be transparent.

The Global View Difference

Our journey began in the heart of Wall Street, where our founders experienced firsthand the relentless pressure to generate fees and commissions for a publicly traded parent company that may be a bank or insurance company. We found that the focus was not on achieving the clients’ goals but the goals of business executives, boards of directors, and shareholders. 

Disillusioned by this environment, where selling products took precedence over client needs and best-in-class investment options were limited, we decided it was time for a change. Our preferred business model was an independent firm with a single layer of management focused on our client's goals. This led to the birth of Global View Investment Advisors.

At Global View, we operate as a fee-only, fiduciary firm. Our approach centers on providing advice that benefits our clients and not the sale of proprietary investment products. Our independence means we can always do what is best for our clients, not a board of directors or shareholders.

Our policy always matches our business and financial fortunes with our clients. Consequently,  the strategies and investments we recommend to you are the same for ourselves and our families. And, when we recommend management by external funds, we ensure those managers invest their assets alongside our clients.

This practice, very unusual on Wall Street, reinforces our commitment to aligning our interests with yours, creating a foundation of trust and shared success.

When you partner with Global View, you can rest assured that our focus is on you and your need for financial advice you can trust.

Contact us to schedule an introductory call so we can learn more about your requirements and you can learn more about our unique level of client service.