3 moves to make a year after opening your brokerage account
Image source: Getty Images
Any money you need for short-term expenses or emergencies should stay in your savings account. While you might not earn much interest on that money (especially these days with such low rates), your money is also protected.
This is not necessarily the case when investing in a brokerage account. Since brokerage accounts can lose money or see significant changes in value over time, it is important to track them. If it’s been a year since you opened your brokerage account, here are three essential things to do now.
1. See how your investments have performed overall
Your goal in putting money into a brokerage account is to make money. It is therefore important to evaluate the performance of your investments.
Right now, if you check your wallet balance from a year ago, it might not be up. Indeed, the stock market has spent much of the start of 2022 in correction territory (i.e. a period in which the broader stock market loses 10% or more of its value). But this is not necessarily problematic.
If your investments are moving in line with the broader market, you may not need to make changes to your holdings. But if your portfolio is down much more than the general stock market, it could be a sign that it’s time to redirect some investments or rethink your strategy.
2. Make sure your portfolio is beautiful and diverse
A diversified portfolio could help you minimize losses during periods of stock market volatility and maximize gains when the market is healthier. But it is possible for a portfolio to start out diversified and become less so over time.
The reason? Investment values can change a lot over the course of a year. And the stocks you bought a year ago may have risen or fallen in value to the point where you are now more heavily invested in one sector of the market and less evenly invested in others.
This is why it is important to do a diversification check one year after opening a brokerage account. If you find, for example, that you are now too heavily invested in technology or energy stocks, you can make changes to your holdings for a more even mix.
3. Make sure you haven’t been charged surprise fees
Some brokerage accounts charge fees for things like inactivity or a low balance. These fees are supposed to be disclosed in advance. But maybe you forgot some of them or thought they wouldn’t apply to you.
That’s why it’s a good idea to do a fee check after your brokerage account has been open for a year. If you see unwanted charges, you can investigate and possibly consider moving your money to a new account.
A brokerage account is something you should monitor regularly. Be sure to tick these items off your list if it’s been a year since you opened your account and started investing in it.
The best credit card cancels interest
If you have credit card debt, transferring it to this superior balance transfer card can pay you 0% interest for 18 months! It’s one of the reasons why our experts rate this card as a top choice to help you control your debt. This will allow you to pay 0% interest on balance transfers and new purchases during the promotional period, and you will not pay any annual fee. Read our full review for free and apply in just two minutes.
We are firm believers in the Golden Rule, which is why editorial opinions are our own and have not been previously reviewed, approved or endorsed by the advertisers included. The Ascent does not cover all offers on the market. The editorial content of The Ascent is separate from the editorial content of The Motley Fool and is created by a different team of analysts. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Comments are closed.