From my perspective, time is moving at the speed of light. I’m continually reminded that we cannot control time. We can only manage it. To a certain degree, the same principle applies to investing. You can’t dictate your results; you can only manage your investments and hope for the best.
Let’s take a look at the conservative portion of your portfolio.
You’ve likely got your money earning interest in a bank or credit union.
You can- and certainly should- shop banks for the highest interest rate
available. But other than that there’s not much you can do. You can’t
control the interest rate; you can only manage it.
On the growth side of your portfolio, you can choose virtually any
stock or mutual fund. The choice is almost limitless. Common, preferred.
Domestic, foreign. By sector, by country. You name it.
Whatever you choose, your investments can move up or down on any
given day. You can’t totally control outside events that affect the
direction. But you can keep a close watch and manage your investments
accordingly. And since it’s still early in the year, the good news is
that you have more than eleven months to do just that.
Let’s take a look at some activities you can control. First, you can
review the IRA rules to determine if you’re eligible to make a
If you don’t already have an IRA account, you can open one now, or
contribute to an existing account and deduct the contribution on your
2015 tax return. This applies to a regular IRA account. Contributions to
a Roth IRA are not deductible, but are withdrawn tax-free.
You can also manage your retirement plan contributions. The beginning
of a new year is always a good time to review your previous year’s
contributions. For example, if you were contributing five percent of
your pay last year and it was relatively painless on your cash flow, now
might be an opportune time to up that contribution to six or seven
If five percent was leaving you feeling a bit squeezed, you could do
some number crunching on the spending side of your ledger and find a way
to do some trimming. Either way, it’s something you can control.
And while there’s much in the world that we can’t control, it’s not
always a bad thing. Prices at the pump, for example, are down
substantially. Conversely, health care costs continue to rise.
This past Christmas I received a fit-bit. For those that are not
familiar, it’s a device that measures your daily steps. Clearly, I can
manage that number; set and meet a daily goal. But, while it may help my
health, it can’t assure good health.
The bottom line is that you can manage activities but you can’t
control results. In order to do that you need to establish measurable
investment goals and objectives. Carefully monitor your progress and
make any adjustments that may be necessary.
When it comes to finances, nobody can ever guarantee results. That’s
why it’s up to you to put your self in the best possible situation for
Knowing that you can’t dictate results, you need to manage the
elements that lead to them. Save and invest and periodically review.
That’s the best you can do.