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Michael Christodoulou

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By Michael Christodoulou

If you’re a certain age, you’ll need to withdraw money from some of your retirement accounts each year. But in 2022, the amount you must take out may be changing more than in other years — and that could affect your retirement income strategy.

Here’s some background: Once you turn 72, you generally must start taking withdrawals, called required minimum distributions, or RMDs, from some of your retirement accounts, such as your traditional IRA and your 401(k) or similar employer-sponsored plan. Each year, your RMDs are determined by your age and account balances. This year, the life expectancy tables used by the IRS are being updated to reflect longer lifespans. This may result in lower annual RMDs than you’d have to take if this adjustment hadn’t been made.

If you’ve started taking RMDs, what does this change mean to you? It can be a positive development for a few reasons:

Potentially lower taxes: Your RMDs are generally taxable at your personal income tax rate, so the lower your RMDs, the lower your tax bill might be.

Possibly longer “lifespan” for retirement accounts: Because your RMDs will be lower, the accounts from which they’re issued — including your traditional IRA and 401(k) — may be able to last longer without becoming depleted. The longer these accounts can stay intact and remain an asset, the better for you.

More flexibility in planning for retirement income: The word “required” in the phrase “required minimum distributions” means exactly what it sounds like — you must take at least that amount. If you withdraw less than your RMD, the amount not withdrawn will be taxed at 50%. So, in one sense, your RMDs take away some of your freedom in managing your retirement income. But now, with the lower RMDs in place, you may regain some of this flexibility. (And keep in mind that you’re always free to withdraw more than the RMDs.)

Of course, if you don’t really need all the money from RMDs, even the lower amount may be an issue for you — as mentioned above, RMDs are generally taxable. However, if you’re 70½ or older, you can transfer up to $100,000 per year from a traditional IRA directly to a qualified charitable organization, and some, or perhaps all, of this money may come from your RMDs. By making this move, you can exclude the RMDs from your taxable income. Before taking this action, though, you’ll want to consult with your tax advisor.

Here are a couple of final points to keep in mind. First, not all your retirement accounts are subject to RMDs­ — you can generally keep your Roth IRA intact for as long as you want. However, your Roth 401(k) is generally subject to RMDs. If you’re still working past 72, though, you may be able to avoid taking RMDs from your current employer’s 401(k) or similar plan, though you’ll still have to take them from your traditional IRA.

Changes to the RMD rules don’t happen too often. By being aware of how these new, lower RMDs can benefit you, and becoming familiar with all aspects of RMDs, you may be able to strengthen your overall retirement income situation.

Michael Christodoulou, ChFC®, AAMS®, CRPC®, CRPS® is a Financial Advisor for Edward Jones in Stony Brook. Member SIPC.

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By Michael Christodoulou

Michael Christodoulou
Michael Christodoulou

As you know, 2021 was full of challenges. We were still feeling the effects of the COVID-19 pandemic when supply chains shut down and inflation heated up. So, if you’re like many people, you might not be sorry to see the year come to a close. But now it’s time to look ahead to 2022. And on a personal level, you may want to set some New Year’s resolutions. You might resolve to improve your health and diet, and possibly learn some new skills, but why not make some financial resolutions, too?

Here are a few ideas to consider:

Prepare for the unexpected. If you haven’t already created an emergency fund, now may be a good time to start. Ideally, you’d like to have three to six months’ worth of living expenses in this fund, with the money kept in a low-risk, liquid account. (If you’re retired, you may want your emergency fund to contain up to a year’s worth of living expenses.) Once you’ve got this fund established, you may be able to avoid dipping into long-term investments to pay for short-term needs, such as costly home or auto repairs or large medical bills.

Boost your retirement savings. The pandemic caused many us to reevaluate our ability to eventually enjoy the retirement lifestyles we’ve envisioned. In fact, 33% of those planning to retire soon said they started to contribute even more to their retirement savings during the pandemic, according to a study from Age Wave and Edward Jones. This year, if you can afford it, increase your contributions to your IRA and your 401(k) or other employer-sponsored retirement plan.

Reduce your debt load. The less debt you carry, the more money you’ll have available to support your lifestyle today and save and invest for tomorrow. So, this year, resolve to cut down on your existing debts and avoid taking on new ones whenever possible. You can motivate yourself by measuring your progress – at the beginning of 2022, record your total debts and then compare this figure to your debt load at the start of 2023. If the numbers have dropped, you’ll know you were making the right moves.

Don’t overreact to the headlines. A lot can happen during a year. Consider inflation – it shot up in 2021, but it may well subside in 2022. If you changed your investment strategy last year to accommodate the rise in inflation, would you then have to modify it again when prices fall? And inflation is just one event. What about changes in interest rates? How about new legislation coming out of Washington? And don’t forget extreme weather events, such as wildfires and floods. 

Any or all of these occurrences can affect the financial markets in the short term, but it just doesn’t make sense for you to keep changing the way you invest in response to the news of the day. Instead, stick with a strategy that’s appropriate for your goals, risk tolerance and time horizon. You may need to adjust this strategy over time, in response to changes in your own life, but don’t let your decisions be dictated by external events. 

These aren’t the only financial resolutions you can make – but following them may help you develop positive habits that can help you face the future with confidence.

Michael Christodoulou, ChFC®, AAMS®, CRPC®, CRPS® is a Financial Advisor for Edward Jones in Stony Brook. Member SIPC.

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By Michael Christodoulou

Michael Christodoulou
Michael Christodoulou

It’s human nature to want to make things easier for our loved ones — and to have great concern about adding any stress to their lives. In fact, 72% of retirees say that one of their biggest fears is becoming a burden on their families, according to the Edward Jones/Age Wave Four Pillars of the New Retirement study. 

How can you address this fear? First, don’t panic. In all the years leading up to your retirement, there’s a lot you can do to help maintain your financial independence and avoid burdening your grown children or other family members. Consider these suggestions:

Increase contributions to your retirement plans and health savings account. The greater your financial resources, the greater your financial independence — and the less likely you would ever burden your family. So, contribute as much as you can afford to your IRA, your 401(k) or similar employer-sponsored retirement plan. At a minimum, put in enough to earn your employer’s matching contributions, if offered, and increase your contributions whenever your salary goes up. You may also want to contribute to a health savings account (HSA), if it’s available.

Invest for growth potential. If you start investing early enough, you’ll have a long time horizon, which means you’ll have the opportunity to take advantage of investments that offer growth potential. So, in all your investment vehicles — IRA, 401(k), HSA and whatever other accounts you may have — try to devote a reasonable percentage of your portfolio to growth-oriented investments, such as stocks and stock-based funds. 

Of course, there are no guarantees and you will undoubtedly see market fluctuations and downturns, but you can help reduce the impact of volatility by holding a diversified portfolio for the long term and periodically rebalancing it to help ensure it is aligned with your risk tolerance and time horizon. Keep in mind, though, that diversification does not ensure a profit or protect against loss in a declining market.

Protect yourself from long-term care costs. Even if you invest diligently for decades, your accumulated wealth could be jeopardized, and you could even become somewhat dependent on your family, if you ever need some type of long-term care, such as an extended stay in a nursing home or the services of a home health care aide. The likelihood of your needing such assistance is not insignificant, and the care can be quite expensive. In fact, the median cost for home health services is nearly $55,000 per year, while a private room in a nursing home can exceed $100,000, according to Genworth, an insurance company. To help protect yourself against these steep and rising costs, you may want to contact a financial professional, who can suggest an appropriate strategy, possibly involving various insurance options.

Create your estate plans. If you were ever to become incapacitated, you could end up imposing various burdens on your family. To guard against this possibility, you’ll want to ensure your estate plans contain key documents, such as a financial power of attorney and a health care directive.

It’s safe to say that no one ever wants to become a financial burden to their family. But putting appropriate strategies in place can go a long way toward helping avoid this outcome.

Michael Christodoulou, ChFC®, AAMS®, CRPC®, CRPS® is a Financial Advisor for Edward Jones in Stony Brook. Member SIPC.

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By Michael Christodoulou

Michael ChristodoulouIf you’ve been investing for many years and you’ve owned bonds, you’ve seen some pretty big changes on your financial statements. 

In 2000, the average yield on a 10-year U.S. Treasury security was about 6%; in 2010, it had dropped to slightly over 3%, and for most of 2020, it was less than 1%. That’s an enormous difference, and it may lead you to this question: With yields so low on bonds, why should you even consider them?

Of course, while the 10-year Treasury note is an important benchmark, it doesn’t represent the returns on any bonds you could purchase. Typically, longer-term bonds, such as those that mature in 20 or 30 years, pay higher rates to account for inflation and to reward you for locking up your money for many years. But the same downward trend can be seen in these longer-term bonds, too — in 2020, the average 30-year Treasury bond yield was only slightly above 1.5%.

Among other things, these numbers mean that investors of 10 or 20 years ago could have gotten some reasonably good income from investment-grade bonds. But today, the picture is different. (Higher-yield bonds, sometimes known as “junk” bonds, can offer more income but carry a higher risk of default.)

Nonetheless, while rates are low now, you may be able to employ a strategy that can help you in any interest-rate environment. You can build a bond “ladder” of individual bonds that mature on different dates. When market interest rates are low, you’ll still have your longer-term bonds earning higher yields (and long-term yields, while fluctuating, are expected to rise in the future). When interest rates rise, your maturing bonds can be reinvested at these new, higher levels. Be sure you evaluate whether a bond ladder and the securities held within it are consistent with your investment objectives, risk tolerance and financial circumstances.

Furthermore, bonds can provide you with other benefits. For one thing, they can help diversify your portfolio, especially if it’s heavily weighted toward stocks. Also, stock and bond prices often (although not always) move in opposite directions, so if the stock market goes through a down period, the value of your bonds may rise. And bonds are usually less volatile than stocks, so they can have a “calming” effect on your portfolio. Plus, if you hold your bonds until maturity, you will get your entire principal back (providing the bond issuer doesn’t default, which is generally unlikely if you own investment-grade bonds), so bond ownership gives you a chance to preserve capital while still investing.

But if the primary reason you have owned bonds is because of the income they offer, you may have to look elsewhere during periods of ultra-low interest rates. For example, you could invest in dividend-paying stocks. Some stocks have long track records of increasing dividends, year after year, giving you a potential source of rising income. (Keep in mind, though, that dividends can be increased, decreased or eliminated at any time.) Be aware, though, that stocks are subject to greater risks and market movements than bonds.

Ultimately, while bonds may not provide the income they did a few years ago, they can have a place in a long-term investment strategy. Consider how they might fit into yours.

Michael Christodoulou, ChFC®, AAMS®, CRPC®, CRPS® is a Financial Advisor for Edward Jones in Stony Brook. Member SIPC.

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By Michael Christodoulou

Michael ChristodoulouIt’s unfortunate but true: As we age, we encounter more health-related issues – and they carry a price tag that can get pretty high in retirement. Will you be ready for these costs?

Perhaps your first step in preparing yourself is knowing what you may be facing. Consider this: 80% of Americans 65 and older have a chronic condition and 42% live with a disability, according to the National Coalition on Aging and the Centers for Disease Control and Prevention, as reported in a recent Edward Jones/Age Wave survey titled Four Pillars of the New Retirement: What a Difference a Year Makes. 

The study also found that retirees’ greatest financial worry is the cost of health care and long-term care – concerns that have increased during the COVID-19 pandemic.

And health care is likely going to be one of the largest expenses in retirement – the average couple might spend $10,000 to $12,000 per year on health care costs. Nonetheless, you can boost your confidence about meeting these costs by making the right moves.

Here are a few suggestions:

Take advantage of your health savings account. If you’re still working, consider contributing to a health savings account (HSA) if it’s offered by your employer. This account allows you to save pretax dollars (and possibly earn employee matching contributions), which can potentially grow, and be withdrawn, tax-free to help you pay for qualified medical expenses in retirement.

Incorporate health care expenses into your overall financial strategy. As you estimate your expenses in retirement, designate a certain percentage for health care, with the exact amount depending on your age, health status, income and other factors. You’ll certainly want to include these costs as a significant part of your planned retirement budget.

Learn what to expect from Medicare. You can enroll in Medicare three months before you turn 65. Before you sign up, you’ll find it helpful to do some research on what Medicare covers, or perhaps even attend a seminar or webinar. On the most basic level, you’ll need to choose either the original Medicare program, possibly supplemented with a Medigap policy, or Medicare Advantage, also known as Medicare Part C. Given all the variables involved – deductibles, copayments, coinsurance, areas of coverage and availability of your personal doctors – you’ll want to choose your plan carefully.

Protect yourself from long-term care costs. No matter which Medicare plan you choose, it won’t cover much, if any, of the costs of long-term care, such as an extended stay in a nursing home. You may want to consult with a financial advisor, who can suggest options to protect you and your family from long-term care costs, which can be considerable.

And of course, do whatever you can to stay healthy, before and during your retirement. It’s been shown that exercise and a balanced diet can help you feel better, maintain your weight and even reduce the likelihood of developing some serious illnesses.

By making the right financial moves and taking care of yourself, you can go a long way toward managing your health care costs in retirement – and enjoying many happy and rewarding years.

Michael Christodoulou, ChFC®, AAMS®, CRPC®, CRPS® is a Financial Advisor for Edward Jones in Stony Brook. Member SIPC.

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By Michael Christodoulou

Michael Christodoulou
Michael Christodoulou

If you’re getting close to retirement, you’re probably thinking about the ways your life will soon be changing. And one key transition involves your income — instead of being able to count on a regular paycheck, as you’ve done for decades, you’ll now need to put together an income stream on your own. How can you get started?

It’s helpful that you begin thinking about retirement income well before you actually retire. Many people don’t — in fact, 61% of retirees wish they had done better at planning for the financial aspects of their retirement, according to an Edward Jones/Age Wave study titled Retirement in the Time of Coronavirus: What a Difference a Year Makes.

Fortunately, there’s much you can do to create and manage your retirement income. Here are a few suggestions:

Consider ways to boost income. As you approach retirement, you’ll want to explore ways of potentially boosting your income. Can you afford to delay taking Social Security so your monthly checks will be bigger? Can you increase your contributions to your 401(k) or similar employer-sponsored retirement plan, including taking advantage of catch-up contributions if you’re age 50 or older? Should you consider adding products that can provide you with an income stream that can potentially last your lifetime? 

Calculate your expenses. How much money will you need each year during your retirement? The answer depends somewhat on your goals. For example, if you plan to travel extensively, you may need more income than someone who stays close to home. And no matter how you plan to spend your days in retirement, you’ll need to budget for health care expenses. Many people underestimate what they’ll need, but these costs can easily add up to several thousand dollars a year, even with Medicare.

Review your investment mix. It’s always a good idea to review your investment mix at least once a year to ensure it’s still appropriate for your needs. But it’s especially important to analyze your investments in the years immediately preceding your retirement. At this point, you may need to adjust the mix to lower the risk level. However, you probably won’t want to sell all your growth-oriented investments and replace them with more conservative ones — even during retirement, you’ll likely need some growth potential in your portfolio to help you stay ahead of inflation.

Create a sustainable withdrawal rate. Once you’re retired, you will likely need to start taking money from your IRA and 401(k) or similar plan. But it’s important not to take too much out in your early years as a retiree, since you don’t want to risk outliving your income. A financial professional can help you create a sustainable withdrawal rate based on your age, level of assets, family situation and other factors. 

By planning ahead, and making the right moves, you can boost your confidence in your ability to maintain enough income to last throughout your retirement. And with a sense of financial security, you’ll be freer to enjoy an active lifestyle during your years as a retiree.

Michael Christodoulou, ChFC®, AAMS®, CRPC®, CRPS® is a Financial Advisor for Edward Jones in Stony Brook. Member SIPC

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By Michael Christodoulou

Michael Christodoulou
Michael Christodoulou

Here is something to think about: You could spend two, or even three, decades in retirement. To meet your income needs for all those years, you’ll generally need a sizable amount of retirement assets. How will Social Security fit into the picture?

For most people, Social Security won’t be enough to cover the cost of living in retirement. Nonetheless, Social Security benefits are still valuable, so you’ll want to do whatever you can to maximize them.

Your first move is to determine when you should start taking Social Security. You can begin collecting benefits when you reach 62 – but should you? If you were to turn 62 this year, your payments would only be about 71% of what you’d get if you waited until your full retirement age, which is 66 years and 10 months. (“Full retirement age” varies, depending on when you were born, but for most people today, it will be between 66 and 67.) Every month you wait between now and your full retirement age, your benefits will increase. If you still want to delay taking benefits beyond your full retirement age, your payments will increase by 8% each year, until you’re 70, when they “max out.”  Regardless of when you file, you’ll also receive an annual cost-of-living adjustment.    

So, when should you start claiming your benefits? There’s no one “right” answer for everyone. If you turn 62 and you need the money, your choice might be made for you. But if you have sufficient income from other sources, you’re in good health and you have longevity in your family, or you’re still working, it might be worthwhile to wait until your full retirement age, or perhaps even longer, to start collecting.

Another key consideration is spousal benefits. If your own full retirement benefit is less than 50% of your spouse’s full retirement benefit, you would generally be eligible to claim spousal benefits, provided you’re at least 62 and your spouse has filed for Social Security benefits.

Survivor benefits are another important consideration. When you pass away, your spouse would be able to receive up to 100% of your benefit or his/her own retirement benefit, whichever is higher. Thus, delaying Social Security could not only increase your own benefit, but also the benefit for your surviving spouse.

An additional issue to think about, when planning for how Social Security fits into your retirement, is your earned income. If you’re younger than full retirement age, your benefit will be reduced by $1 for each $2 you earn above a certain amount, which, in 2021, is $18,960. During the year you reach full retirement age, your benefit will be reduced by $1 for each $3 you earn above a set amount ($50,520 in 2021). But once you hit the month at which you attain full retirement age, and from that point on, you can keep all of your benefits, no matter how much you earn (although your benefits could still be taxed).

One final point to keep in mind: The more you accumulate in your other retirement accounts, such as your IRA and 401(k) or similar employer-sponsored plan, the more flexibility you’ll have in managing your Social Security benefits. So, throughout your working years, try to contribute as much as you can afford to these plans.

Michael Christodoulou, ChFC®, AAMS®, CRPC®, CRPS® is a Financial Advisor for Edward Jones in Stony Brook. Member SIPC.

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By Michael Christodoulou

Michael Christodoulou
Michael Christodoulou

Independence Day is almost here. And as we make progress in moving past the COVID-19 pandemic, more of us will be able to enjoy Fourth of July activities. However you observe the holiday, it’s important to recognize all the liberties we enjoy in this country. But you may still need to work at one particular type of freedom – and that’s financial freedom. How can you achieve it?

There’s no one instant solution. But you can work toward financial independence by addressing these areas:

  • Retirement savings – Approximately 45% of Americans think the ideal retirement involves “enjoying my well-earned freedom,” according to the March 2021 Edward Jones/Age Wave Four Pillars of the New Retirement study. But when you’re retired, the risk to this freedom is obvious – the paychecks have stopped but the bills haven’t. Furthermore, you could spend two or three decades in retirement. That’s why it’s so important to contribute as much as you can afford to your tax-advantaged retirement accounts, such as your IRA and your 401(k) or another employer-sponsored plan. At a minimum, put in enough to earn your employer’s matching contribution, if one is offered. Whenever your salary goes up, try to increase the annual amount you put in your 401(k) or similar plan. And if appropriate, make sure you have a reasonable percentage of growth-oriented investments within your 401(k) and IRA. Most people don’t “max out” on their IRA and 401(k) each year, but, if you can consistently afford to do so, and you still have money you could invest, you may want to explore other retirement savings vehicles.
  • Illness or injury – If you were to become seriously ill or sustain a significant injury and you couldn’t work for an extended period, the loss of income could jeopardize your ability to achieve financial independence. Your employer may offer disability insurance as an employee benefit, but this coverage is typically quite limited, both in duration and in the amount of income being replaced. Consequently, you may want to consider purchasing private disability insurance. Keep in mind that this coverage, also, will have an end date and it probably won’t replace all the income lost while you’re out of work, but it will likely be more expansive and generous than the plan provided by your employer.
  • Long-term care – Individuals turning 65 have about a 70% chance of eventually needing some type of long-term care, such as a nursing home stay or the assistance of a home health aide, according to the U.S. Department of Health and Human Services. And these services are quite expensive – the average annual cost for a private room in a nursing home is more than $100,000, according to Genworth, an insurance company. Medicare typically covers only a small part of these expenses, so, to avoid depleting your savings and investments (and possibly subjecting your grown children to a financial burden), you may want to consider long-term care insurance or life insurance with a long-term care component. A financial advisor can help you choose a plan that’s appropriate for your needs.

By addressing these areas, you can go a long way toward attaining your financial independence. It will be a long-term pursuit, but the end goal is worth it.

Michael Christodoulou, ChFC®, AAMS®, CRPC®, CRPS® is a Financial Advisor for Edward Jones in Stony Brook. Member SIPC.

 

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By Michael Christodoulou

Michael Christodoulou
Michael Christodoulou

Now that we’ve gained at least some space from the COVID-19 pandemic, summer travel is heating up. But while you might be eager to hit the road, you won’t want your investments to take a vacation — you need them to work hard for you consistently. But how can you make this happen? 

Here are some ideas:

Know your destination.“If you don’t know where you want to go, then it doesn’t matter which path you take.” This bit of wisdom, paraphrased from the classic children’s book, Alice’s Adventures in Wonderland, may be appropriate for, say, hikers exploring a new landscape. But as an investor, it matters a great deal which path you take. If you only dabble in investing, occasionally putting some money into one investment or another, it will be difficult to build a portfolio that’s consistently working in your best interest. It’s important to create a long-term investment strategy based on where you want to go in life — that is, how long you plan to work, what sort of retirement lifestyle you envision, and so on.

Match goals with investments. Some investments are designed to achieve certain goals. To illustrate: When you contribute to an IRA and a 401(k) or similar employer-sponsored plan, you’re investing for one specific, long-term goal: a comfortable retirement. While you can tap into these accounts for other purposes — though doing so might incur immediate taxes and penalties — they are designed to provide you with income during your retirement years. Similarly, you may have other investments for other purposes, such as a 529 education savings plan. Here’s the key point: Goals-based investing, by its nature, can help ensure your portfolio is always working on your behalf, in the way you intended.

Invest for growth. Ideally, hard work produces results, and one of the main results you want from your investments is growth — that is, you want your investments to appreciate in value so they can eventually help you meet your goals. But if you are overconcentrated in vehicles such as certificates of deposit (CDs) and government securities, you may end up lowering your growth potential. That’s not to say that CDs and Treasury bills are in some sense “lazy.” They can provide you with income and help you reduce the impact of market volatility on your portfolio. But to achieve most of your goals, you’ll need a reasonable number of growth-oriented investments working for you, with the exact percentage based on your needs and life stages.

Check your progress. How else can you ensure your investments aren’t just taking it easy? By checking up on them. If you follow a buy-and-hold strategy, your portfolio shouldn’t require many changes if it already reflects your goals, risk tolerance and time horizon. Too much buying and selling could jeopardize your ability to follow a consistent, long-term strategy. However, “buy and hold” doesn’t mean “buy and forget.” By reviewing your portfolio at least once a year, you can determine if your investments are performing as they should. If they’re not working for you as you’d like, you may need to make some changes.

If you’re traveling this summer, relax and enjoy yourself — but keep those investments working hard.

Michael Christodoulou, ChFC®, AAMS®, CRPC®, CRPS® is a Financial Advisor for Edward Jones in Stony Brook. Member SIPC.

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By Michael Christodoulou

Michael Christodoulou
Michael Christodoulou

On April 22, we observe Earth Day, an occasion that has inspired millions of people over the decades to take steps to clean up our world. Of course, your physical surroundings are important, but you also operate in other “ecosystems” – social, cultural and political. And you’ll need to consider your investment environment, too. How can you improve it?

Here are a few suggestions:

  • Avoid “toxic” investment strategies. The dangers of pollution helped drive the creation of Earth Day. As an investor, you also need to watch out for “toxins” – particularly in the form of unhealthy investment techniques. For example, chasing after “hot” stocks can burn you. In the first place, by the time you’ve heard of them, they may already be cooling off. Second, and probably more important, these hot stocks just may be wrong for the investment mix that’s appropriate for your needs. Another toxic investment strategy: trying to “time” the market by “buying low and selling high.” No one can really predict when market highs and lows will occur, and if you’re always jumping in and out of the investment world, you’ll likely waste time and effort – not to mention money. Instead of looking for today’s hottest stocks or guessing where the market is heading, try to create and follow a long-term investment strategy based on your goals, risk tolerance and time horizon.
  • Reduce waste.From an environmental standpoint, the less waste and garbage we produce, the better it is for our planet. As an investor, can you find “wasteful” elements in your portfolio? It’s possible that you own some investments that may be redundant – that is, they are virtually indistinguishable from others you may have. Also, some investments, due to their risk profile or performance, no longer may be suitable for your needs. In either case – redundancy or unsuitability – you might be better off selling the investments and using the proceeds to purchase others that can be more helpful.
  • Recycle wisely.Recycling is a major part of the environmental movement. At first, though, you might not think the concept of recycling could apply to investing. But consider this: If you own stocks or mutual funds, you may receive dividends, and, like many people, you may choose to automatically reinvest those dividends back into the stocks or funds. So, in a sense, you are indeed “recycling” your dividend payments to boost your ownership stakes – without expending additional resources. And, in fact, this can be quite an effective and efficient way to increase your wealth over time.
  • Plant some “trees.”Planting trees has always been a key activity among boosters of the environment – with the recognition that their efforts will take years, or even decades, to reach fruition. When you invest, you must sometimes start small. By purchasing a limited amount of an investment and nurturing it over the years by adding more shares, you may one day have achieved significant growth. (Keep in mind, though, that there are no guarantees – variable investments such as stocks can lose principal.)

By making these and other moves, you can create a healthy investment environment – one that can help you achieve your long-term goals.

Michael Christodoulou, ChFC®, AAMS®, CRPC®, CRPS® is a Financial Advisor for Edward Jones in Stony Brook. Member SIPC.

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