What You Own and Why You Own It

March 22, 2012 - Al
Decluttering your investments isn’t just about owning too many mutual funds and the need to reduce the number of them.
It also can be about consolidating different accounts that may be scattered around, for example, accounts with a former employer’s retirement plan that are still with the employer or accounts you opened a long time ago, left to languish.
When you have too many accounts, it can be difficult to know what you own and why you own it. Following an investment strategy that’s personalized to you is key — after all, your goals, circumstances, experience, comfort level, etc., can be quite unique. But getting a handle on this can be challenging when you own several accounts, making it hard to:
  • Be properly diversified; this means not being over diversified so that you own duplicate investments that could expose you to too much risk
  • Maintain a level of risk that is right for you — by occasionally adjusting your investments
In addition, decreasing the number of accounts might help you reduce:
  • Account maintenance fees by combining accounts or adding new accounts under one or two financial institutions
  • Paperwork you receive and have to keep track of — quarterly statements, tax forms, etc.
  • Passwords you have to maintain and look up for online access
Now there can be a good reason to not consolidate — to help ensure you keep access to certain investment options or services or, in certain situations, for tax planning reasons. And, of course, you might be comfortable managing several accounts at a few different companies and, you might even like taking advantage of certain features of each.

But if you don’t have a good handle on what you own and why you own it, simplifying where you own it may be a good first step. AC: 0312-5554

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