It is often said that a messy desk is the sign of a busy worker, but when it comes to your investments, clutter could be a sign of missed opportunities. Simplifying portfolios by consolidating accounts could be an important part of your investment strategy for 2021.
The average Baby Boomer has had 12 jobs in their lifetime, which means they have had many opportunities to begin accounts where money could be left behind. Should something unexpected happen to you, a complex portfolio will only create more problems for your family to work through.
Obviously, there are some accounts that can’t be simplified together, such as your accounts that are funded with pre-tax or after-tax contributions. In addition, there is the value that having a diverse portfolio brings to consider. But there should also be an element of ease in tracking and managing your investments, which is why many investment advisors will recommend simplification at some level.
Still on the fence about simplifying your investments? Here are more benefits you could see by simplifying in 2021:
Save on Fees
Most accounts are managed, which costs money. If you have several accounts and trading is more frequent, you begin to rack up transaction fees. The more trading, the more fees you incur. Rather than erode your returns, simplify your portfolio. Not only will you cut down on active management, but you’ll also cut down on fees.
Easier to Track and Manage
With a complex investment situation, it can be difficult to see where you might have overlapping assets. Diversification being the goal, a more simplified investment situation will help you gain more visibility to track and manage with success.
Focus on the Long Term
Investment advisors frequently warn that expecting fast and furious short-term goals is not realistic and should not be the focus of a strategic investment plan. One of the benefits of taking a look at your investments and combining them is that you can refocus on the long term and make better decisions for your future.
If you are constantly evaluating every change in the stock market because you have so much going on in your investments, you may be working much harder than you should have to. Simplifying your accounts can take some of that stress away.
At Lawson Kroeker, we are committed to assisting our clients in saving on fees, keeping better track of their investments and focusing on their goals. For more information about simplifying your investments in 2021, contact us and let’s talk about our process.