New Year Investor Checklist

As 2011 passes and 2012 rolls in, now is a good time to review the best year end investment strategies and to be sure you've checked them off of your list.

1. Review Asset Allocation: Is your mix of stocks, bonds and cash still appropriate for your needs? Asset allocation should be adjusted whenever there is a life change, such as the birth of a child, the death of a spouse, a marriage, a divorce, or a significant career change.
2. Review Asset Location: This is not allocation, it's location. If you have bond funds or dividend-paying stock funds in your regular brokerage account, you may be paying more taxes than you should. Be sure to place funds that generate taxable income into your tax-deferred accounts, such as IRAs or 401(k)s.
3. Remember Required Minimum Distributions: If you are above the age of 70.5, you will generally take required distributions from your IRA. Don't forget to do it or you may owe up to 50% penalty.
4. Consider Rebalancing Your Portfolio: Once per year is an effective frequency to sell shares of your winning funds and buy shares of your losing funds. This way your asset allocation may be returned to its optimal balance for your needs.
5. Take Advantage of Tax Loss Harvesting: It's too late to make strategic fund purchases or trades to sell shares of mutual funds for tax loss harvesting in 2011. However, now is a great time to look back at 2011 to see if you made any trades in your regular brokerage account during the year (investment trades in tax-deferred accounts, such as IRAs and 401(k)s don't generate capital gains or losses).
6. Know Where to Invest for 2012: You may want to make a few strategic moves to tweak your mutual funds portfolio for performance in 2012. Even if you don't make any major changes to your portfolio, a new year is a good time to revisit your investment allocations and be sure they are in line with your objectives.