Reminders & Tips (December)

Rebalance your 401k
If you have a 401k and haven't looked at what investments you own since last year (or even since you set it up), you're likely due for a rebalancing. It's best practice to rebalance your 401k at least once or twice a year.

What does rebalancing mean? While some investments perform well one year, they may not perform as well in future years (and vice versa). Rebalancing helps you take profits from stronger performing names and reinvest them into weaker performing names, with the hope that they'll perform better in the future and you'll catch the rebound. In some years, technology companies may be hot, but other years, real estate or energy may be stronger. For example, in 2015, the energy sector was down -23%, but in 2016 it was up +28%. 

If you've never rebalanced your 401k before, the easiest way is to do so is to call your 401k administrator and ask them to (1) rebalance it for you or (2) walk you through the steps of setting it up online so you'll know how to do it going forward.