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Practical Ways To Simplify Your Investments Thumbnail

Practical Ways To Simplify Your Investments

Why You Should Simplify Your Investments

We encounter many prospective clients that have purchased a number of individual securities or funds, and they are not exactly sure why they originally purchased or continue to hold them. How do you know if what you have aligns with what you are trying to achieve? 

We also see folks that have numerous 401(k) plans and multiple IRA’s that are managed differently and have wildly varying fee structures. It can be a daunting task to figure out how they should be invested and the best way to consolidate them. It is not always a straightforward process. 

We help many families organize their current investment accounts and manage them in a way that gives them a simple, but structured approach to success. Yes, it differs for each family based on spending and savings goals, but by working together, we can structure a solution together that aligns with the clients’ goals and objectives. 

Here are a few ways you can get started in streamlining your investment accounts. 

Consolidate Your Accounts

Managing multiple investment accounts across different platforms can lead to unnecessary complexity and confusion. Consider consolidating your accounts wherever possible to streamline your investment management process. By centralizing your assets in a single brokerage account or investment platform, you can simplify tracking, monitoring, and rebalancing your portfolio more efficiently. 

This may sound easy in theory, but there are a lot of things to consider – investment options available, administrative fees, revenue sharing, etc. – if you are reviewing employer retirement plans and figuring out the best way and investments to select. You shouldn’t feel like you must make these decisions on your own, so work with someone to help you properly analyze and document what makes sense for your situation.

Automate Your Investments

Out of sight, out of mind. If it’s in your checking account, chances are you are going to spend it soon. This is why we love employer plans and automatic distributions to high-yield savings or brokerage accounts.

Take advantage of automation tools to streamline your investment contributions and asset allocation. Setting up automatic transfers from your bank account to your investment accounts on a regular basis ensures consistent savings and investment discipline. 

Embrace the Power of Index Funds

One of the things we have learned in our investment career is that no one can consistently predict what is going to happen in markets. To further prove this point, we have talked to several folks over the years who work for actively managed strategies (they work as an analyst or portfolio manager and their job is to pick securities that they think will outperform the market), and you know what almost all of them invest their own money in? Index funds. 

Investing in index funds is an effective way to achieve broad diversification while minimizing the need for constant monitoring of individual securities. You can’t control investment performance for active strategies, but you can control fees and index funds typically give you low, predictable fees.

Simplicity Breeds Success

Keeping things simple in a world filled with investment complexities is not always easy and figuring out where to start can be intimidating. Talk to a fee-only fiduciary that can help you think through these things in a way that makes sense for you. Regardless of your situation, we would love to help you get on track to help you and your family get on the path to financial success. Let us know how we can help!

Authored by Stephen Blahovec and Michael Rausch of North River Wealth Advisors.  We are an independent, fee-only financial planning and investment management firm located in Pittsburgh, PA servicing clients locally and across the country.  To learn more, contact us here.

This content is developed by North River Wealth Advisors from sources believed to be providing accurate information. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.