FINANCIAL FOCUS: Financial resolutions for the new year

Published: Thursday, January 2, 2014 at 18:16 PM.

Without such a fund, you might be forced to dip into your long-term investments to pay for emergencies, such as a new furnace, a major car repair, and so on. You might not be able to finish creating your emergency fund in one year, but contribute as much as you can afford.

•Plan for your protection needs. If you don’t already have the proper amounts of life and disability insurance in place, put it on your “to do” list for 2014. Also, if you haven’t taken steps to protect yourself from the considerable costs of long-term care, such as an extended nursing home stay, consult with your financial professional, who can suggest the appropriate protection or investment vehicles.

You may never need such care, but that’s a chance you may not want to take — and the longer you wait, the more expensive your protection options may become.

•Don’t overreact to market volatility. Too many people head to the investment “sidelines” during market downturns. But if you’re not invested, then you miss any potential market gains— and the biggest gains are often realized at the early stages of the rally.

•Focus on the long term. You can probably check your investment balance online, which means you can do it every day, or even several times a day — but should you? If you’re following a strategy that’s appropriate for your needs, goals, risk tolerance and time horizon, you’re already doing what you should be doing in the long run. So there’s no need to stress yourself over the short-term movements that show up in your investment statements.

Do whatever you can to turn these New Year’s resolutions into realities. Your efforts could pay off well beyond 2014.

Joe Faulk is a financial adviser.



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