Mutual Funds: Your Portfolio

BOSTON (WBZ-AM) -- The stock market is on everyone’s mind these days. Okay, right behind what’s happening in DC.

The S&P 500 was up 19% last year, the NASDAQ was up 24% and the DOW at 25%. And 5 companies accounted for 60% of that DOW increase, 3M, UnitedHealth Group, Boeing, Home Depot and Apple.

Most of us saw a healthy increase in our portfolios last year. And the last significant downturn in the market was in 2008 when the S&P 500 was down 38%.

I cannot predict what the market will do this year. I do know that interest rates will be rising, we have some new tax laws, Washington is a volatile place and governments around the world are arming themselves against enemies. All of which will affect the stock market and us.

At the beginning of this new year you will want to review your portfolio. Is it still based on your goals and time horizon? If college money was the goal and your kiddo is starting college in the next year or two you will want to sell off some of those winners you had last year and put the money in something safe so it is there for the first semester check which will be due in August.

The temptation though is to let the portfolio ride a few more months until the summer to see what the market might do. And then sell. If it goes up you will be kicking yourself for selling now, but if the market tanks you will be kicking yourself for not getting out in time. When to sell is a hard decision.

If your goal is a comfortable retirement and you are 40, stick to your asset allocation of mostly stocks. If you are 60, you may want to re-balance your portfolio. A 70% stock allocation would be a prudent.

A word of caution here, with interest rates positioned to increase for 2018 that could affect the bond market. So consider buying individual bonds or other cash equivalents for your portfolio. Those would include money markets, Treasury bonds, and CDs.

You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m. and 3:55 p.m.

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