Tips for Your Year-End Investment Planning

With volatile markets, portfolio review is critical

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Dec 08, 2011, 09:35 ET

CHICAGO, Dec. 8, 2011 /PRNewswire/ -- Year-end is a prime time to meet with your financial advisor and review your investment portfolio and retirement plans. However, when the markets are extremely volatile, it is even more critical to have that conversation with your trusted financial advisors.

"With markets as volatile as we are experiencing this year, it is especially important to update your risk profile and ensure that it is aligned with your long-term goals," said Mike Miroballi, President and Chief Operating Officer, BMO Harris Financial Advisors. "Then, review your portfolio to be sure that you are on track to reach those long-term goals with investments that reflect your risk tolerance and life circumstances."

Here are some important points to consider and discuss with your professional advisors during your year-end review:

Review your overall portfolio, you may need to rebalance your allocations. If you do, then work with your tax advisor to identify if it would be more advantageous (for tax purposes) to do so before or after December 31st.
Determine if your asset allocation is still appropriate for your time horizon and goals. You may want to be more aggressive if you're not meeting your financial targets; or more conservative if you're getting closer to retirement; or, it may be the time to reconsider that investment you avoided in the past because of its high valuation, perhaps it is now selling at a more attractive price.
If you are considering changes to the portfolio, be sure to consider the length of time you've owned the investment. Assets held for a year or less, generate short-term capital gains, which are taxed as ordinary income. Depending on your tax bracket, that rate could be much higher. Long-term capital gains on the sale of assets held for more than a year are taxed at lower rates. All allocation changes should be reviewed in relation to current market situations.
Take advantage of transactions that will cause minimal impact on your portfolio, but may offer some big tax advantages (please discuss with your tax advisor). Selling a position to lock in a loss while buying something similar as a placeholder for a short period is a strategy your advisor might recommend. While taxes should never be the driving force behind your investment decisions, you might consider strategies that can assist in minimizing the tax impact on your portfolio. Always work closely with your investment and tax advisors to determine the best course of action to meet your financial needs.
Timing is everything, and it can work for or against you. Your financial and tax experts can provide a variety of strategies that will help you capitalize on investment opportunities and guide you through the process to avoid any missteps.

Whether you are just starting out or happily enjoying your retirement, it's important to review your portfolio at least once a year. Call your trusted investment advisor and your tax advisor today to schedule a review that may just bring you some short and long term financial benefits.

For more information about financial planning please call: 877-225-3863 or visit BMO Harris Financial Advisors at: https://www4.harrisbank.com/Investments+and+Retirement+Planning/Advisory+Approach/Disciplined+Approa.

BMO Harris Financial Advisors

BMO Harris Financial Advisors Inc., member FINRA/SIPC, is an SEC-registered investment adviser and full-service brokerage, offering securities, investment advisory services, and insurance products to meet the needs of individual investor clients. With a focus on financial planning, BMO Harris Financial Advisors specializes in helping clients develop and implement personalized plans for long-term financial goals such as a financially successful retirement. BMO Harris Financial Advisors is an affiliate of BMO Harris Bank N.A. and a part of BMO Financial Group.

About Harris Private Bank, A Part of BMO Financial Group

Harris Private Bank offers a comprehensive range of wealth management services that include investment advisory, trust, banking and financial planning to meet the financial needs of high net worth clients. Through integrated teams of experienced financial professionals, Harris Private Bank helps its clients realize their financial and lifestyle goals with solutions that are custom tailored and delivered with the highest level of personalized service. Harris Private Bank is a member of the Harris family of wealth management services.

Harris Private Bank is a trade name used by various subsidiary financial service providers of BMO Financial Corp. Banking product and services offered through Harris Private Bank are provided by BMO Harris Bank N.A. and its bank affiliates. Member FDIC. Not all products and services are available in every state and/or location. Financial planning and investment advisory services provided by Sullivan, Bruyette, Speros and Blayney, Inc., an SEC -registered investment advisor. Investment advisory services are also provided by Stoker Ostler Wealth Advisors, Inc.,an SEC-registered investment advisor. Family Office Services are provided by Harris myCFO, Inc. Investment Advisory Services are also offered by Harris myCFO Investment Advisory Services LLC, an SEC-registered investment advisor and a wholly-owned subsidiary of Harris myCFO, Inc. Securities, investment advisory services and insurance products are offered through Harris Investor Services, Inc. Member FINRA/SIPC. SEC-registered investment adviser. Harris Investor Services, Inc. and BMO Harris Bank N.A. are affiliated companies.

Investment products and insurance products offered: ARE NOT A DEPOSIT – NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY – NOT GUARANTEED BY ANY BANK – MAY LOSE VALUE.

SOURCE BMO Financial Group