By Dan Serra
RISMEDIA, Nov. 27, 2008-(MCT)-The holidays are a time to spread cheer and give thanks. Yeah, right.
That may be harder this year when you look at your investments. We’ve had one of the worst years in history, and it doesn’t appear to be getting much better anytime soon. But don’t turn into a Scrooge-find some joy by focusing on what you have instead of what you don’t have.
This year there are plenty of things to be thankful for, and that should be enough to bring you good cheer:
1. You have a balanced investment portfolio. Just think if all your money was in the stock market. Thankfully, you have it spread out across bonds, money markets, real estate, etc. Being diversified is the difference between being down 50% and down 30%. You’ve lost, but not as much. All your money in stocks? Now you know why to diversify.
2. You have an emergency savings account. In these times where job losses keep piling up and you don’t know if you’re next, having that extra stash of cash can come in handy. Experts recommend three to six months of cash in savings to keep paying your monthly expenses until you find another job. It may be wiser to keep even more tucked away as the job market is more unstable.
3. You have bargaining power. When the economy is down, businesses get desperate to stay afloat. Therefore, the consumer has more power to negotiate prices. Don’t settle on the first price you see. Shop around or ask for a discount. Whether it’s a pair of shoes or a house, someone is offering a great bargain because they fear they are not able to sell it.
4. You have your health. Money means nothing if you can’t be healthy enough to enjoy it. Exercising regularly helps you cope emotionally and physically. You’ll be amazed at how good you feel when you exercise more. That will offset the glum feelings of a down portfolio.
5. You have next year. As fans of the Chicago Cubs say, “Wait ’til next year!” Most of us are eager to get 2008 behind us and hope for better year-to-date results in 2009. It’s one step closer to a recovery. Use the first of the year as your deadline for rebalancing your portfolio after having it thrown for a loop in 2008. This allows you to build a portfolio that’s closer to your risk tolerance if this year’s fall has been tough to swallow. However, risk takers may find it more appropriate to increase stock holdings to ride any recovery.
Dan Serra is a financial planner with Strategic Financial Planning in Plano, Texas.
© 2008, McClatchy-Tribune Information Services.
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