A record setting year for the stock market is over.  In 2013, the Dow Jones Industrial Average was up 26.5%, the S&P 500 (large-cap stocks) was up just under 30%, the NASDAQ composite (dominated by tech stocks) jumped 38.3%, and the Russell 2000 (small-cap stocks) was up 37%.  I’ve already heard in the last few weeks different opinions about what people think the future holds.  Some clients have said that the market is now too high and they want to change their investment objective to something more conservative, while others have said exactly the opposite.  This leads us to the title of this article: Resolutions for 2014.

1)    Don’t let short term market swings affect your long term objectives.  I harp on this a lot, but I want to remind you that we don’t have a crystal ball.  Had the market gone down 30% over the last year, I would be saying the same thing.  Have sufficient cash on hand to take care of your short term needs and periodically rebalance your long-term investments to stay in line with your long-term objectives.

2)    You can’t control the market or the economy, but you can control:

• How much you spend – review your largest expenses and see what changes you could make in the coming year.
• How much you save – if you are still working, look at slightly bumping up your saving in 2014.

3)    Reevaluate your estate plan:

• Last Will and Testament – review it and ensure it still does what you want it to do.  If you don’t have a will, now is the time!
• Life insurance – do you have more than you really need in order for your survivors to take care of things once you are gone?  If so, reduce or eliminate it.

4)    Don’t forget that YOU are your most important asset:

• Be happy – optimistic people live longer!
• Be healthy – eat well and stay active; these also help you to be happy.
• Keep learning – an active mind wards off dementia and depression.

Happy New Year!