4. Manage your credit. Managing your credit means different things to different people. I'm going to take a pretty broad view here rather than focusing on the nuts and bolts of the monthly payments on your credit cards.
Your credit score is based on the information in your credit report. You can get a free copy of your credit report once each year from each of the consumer reporting agencies. Personally, I space out my requests so I get a different credit report every four months: in September it's Experian, in January it's Equifax and in May it's TransUnion. I review the report and dispute any errors. Opt out of credit card offers by visiting OptOutPrescreen.com or calling 888-5-OPTOUT ( 888-567-8688). This year, I also used the Direct Marketing Association's Web site to remove myself from direct-mail lists. Consider freezing your credit report. It's not right for everyone, but it's a great way to protect you from identity theft. See the Bankrate feature "
Credit freezes available nationwide" and decide if a credit freeze is right for you.
5. Review and rebalance your portfolio. From time to time, it's important to rebalance your portfolio to make sure you have the right investment mix. Investment allocations in financial securities are typically split between stocks, bonds and cash. Cash is financial shorthand for money market debt investments with a final maturity of a year or less.
The investment allocation that's right for you will depend on your risk tolerance, investment goals, and market outlook. For example, you may decide that an allocation of 50 percent stocks, 30 percent bonds and 20 percent cash is right for you. If this year's stock performance brought your stock allocation up to 60 percent, rebalancing the portfolio will get you back to your target allocation. Calendar rebalancing is one approach to adjusting how you're invested. With this technique, you adjust your portfolio on a regular basis. In target rebalancing, you wait until an asset allocation is above (or below) the maximum (or minimum) target asset allocation. Meanwhile, tactical asset allocation has you underweight or overweight asset classes based on your outlook for that asset class -- it's also called active management or timing the market. For the do-it-yourselfer, there are a host of asset allocation worksheets available on the Web. SmartMoney.com offers two work sheets -- one for people approaching retirement and one for retirees. replacecontent-tcm:8-21918 Tax and other considerations, like estate planning, can influence your desire and ability to rebalance your portfolio. It's a good idea to consult with your financial planning professional and tax adviser before reallocating your investments. |