A new year means taking steps to evaluate financial progress

It has been a wild ride over the past 12 months, but let's look ahead

It a very volatile year for stock and bond markets in 2011, largely due to uncertainty of the strength of certain European economies.

There is nothing we can do on a large scale, but we have some control over what is within our grasp. Many portfolios are in the red this year (as of mid October), which has led to capital loss and an income reduction in some cases. If you have found yourself worried over the stock markets and your portfolio performance during the past year, it may be a good time to review your appetite for risk.

Remember that a reduced risk profile may lead to an increased bond component and income that is taxable at your highest marginal rate.

It is important to balance your required income and level for risk to ensure you are not actually earning less in real dollars due to the different tax rates for various asset classes. Now is a good time to evaluate your financial progress and performance for the year. Although no one can tell what the next year will bring, the financial plan you have built should see you through both good and bad times.

It is important to remember the success of your investments doesn’t depend on just one year’s performance, but rather, on your commitment to remain invested over the long term. Goals are not reached over months, but decades.

That is easy to forget sometimes, but a clear vision of the big picture and a financial roadmap to get there will help you through the volatile times. Meet with your advisor on a regular basis, don’t let unanswered questions leave you worried.

Jointly, you and your advisor will make sure your portfolio is still soundly aligned with your risk profile and long-term goals. In order for the plan to work for you, it must be up to date; have there been any changes in your life that might affect your personal financial situation over the last year? Think back over the year, how many times did your advisor call you, did you meet face to face, did you understand everything they said or did they talk over your head? If you did not answer positively to all of these questions, it may be the reason why your financial plan is out of date, and maybe, why you need a second opinion.

Year end brings a time to reflect and a time to consider what you want to change for the new year.

Taking action will be your important first step and may bring a new year with new opportunities!

For further information, Carol Plaisier, CFP®, Investment Advisor with DWM Securities Inc., can be reached at the DundeeWealth office in Parksville (250) 248-2399, or by email cplaisier@dundeewealth.com or via www.carolplaisier.com.

This article was prepared by Carol Plaisier, CFP®, FMA, AMP (Accredited Mortgage Professional) who is an Investment Advisor with DWM Securities Inc.  This is not an official publication of DWM Securities Inc. and the  views (including any recommendations) expressed in this article are those of the author alone, and they have not been approved by, and are not necessarily those of DWM Securities Inc.

DWM Securities Inc., Member-Canadian Investor Protection Fund, is a DundeeWealth Inc. Company.


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