Haven’t touched your brokerage account for years? Do these 3 steps now
Opening a brokerage account and investing in it is a good way to grow your wealth. But your brokerage account isn’t something you just have to set up and forget. A good idea is to check your investments at least three or four times a year. So if you can’t remember the last time you looked at your brokerage account, here are some essential steps to take.
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1. Check your wins and losses
Some of your investments may have performed well over the past few years, while others may have underperformed. If this is the first time this is your first brokerage account in a long time, you’ll want to go into each position and see how it goes – don’t just look at your overall account balance to see if it’s going up or down. You may own a specific stock that is constantly losing value month to month, and could be a good solution to throw away and replace with a more solid alternative.
2. Make sure your portfolio is diversified
If you own stocks and other investments, it is important to try to maintain some diversity within your portfolio. A diverse mix can help you increase your wealth and can also protect you from losses during times of turbulence.
If it has been years since you have built your portfolio, you may be heavily invested in a specific segment of the market due to changes in the value of your investments. If so, you might want to rebalance.
For example, suppose three years ago you bought eight stocks and they covered four market segments: tech, energy, healthcare, and banking. If one of those stocks has appreciated in value so that half of your portfolio is now invested in tech stocks while the other half is invested in the remaining three segments, you may want to rebalance to make them. more uniform things. If you don’t and the tech industry takes a hit, the value of your portfolio could drop.
3. See how your brokerage account compares
Brokerages have become more and more competitive in recent years, so it’s easier now to find an account that doesn’t charge commissions on transactions. Likewise, many brokerage firms do not have an account minimum and many offer other perks like split investing, which allows you to buy part of a stock if you don’t want to spend money. money for a whole share.
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If it’s been a while since you looked at your account, do a comparison. See what advantages you get in your account over other accounts to determine if it makes sense to move your money elsewhere.
You can also consider a brokerage account that allows you to invest in cryptocurrency. There are several that allow you to purchase a mix of stocks and digital coins.
If you haven’t been keeping an eye on your brokerage account, now is the time to break the habit. Spend some time doing a thorough review and making any necessary changes. Giving your investments the attention they deserve could get you closer to your financial goals.