By Lee Sherman
If we learned one thing from 2020 it’s that life is unpredictable and so is the stock market. Who would have predicted that the market would actually have one of its best years ever, while just about everything else was at its worst?
2020 was the most tumultuous in a lifetime but if you participated in the stock market, it’s likely that your portfolio is the one thing you can cheer about. After the pandemic, many people are reevaluating their approach to all aspects of their lives. This could be the year you retire, decide to change careers, or start a business. When it comes to your investments, you may choose to stay the course or, at the riskier end of the scale, decide to invest in what seem to be companies that thrive during a pandemic. Here are some things to consider doing differently in this new year:
Redo Your Budget
Now’s a good time to reconsider where your monthly expenses are going. If you’re like most people, you’re spending way less on eating out (fine dining restaurants have resorted to take-out, meal kits, and other strategies to stay alive), less on clothing and dry-cleaning, and a lot more on streaming services, Internet connectivity, and kitting out a home office.
Take Stock of Your Investments
If your portfolio includes individual stocks or if you’ve ever considered investing in them, you may want to shake things up a bit. One of the biggest financial success stories of the year is Zoom, the video-conferencing company that reported fiscal third-quarter revenue growth north of 300% in 2020. Before we all became confined to our home offices, most financial advisors wouldn’t have considered Zoom to be such a winner. Indications are that the working from home trend is set to continue for some time. Other companies that had a good year include Netflix, Peloton, and Door Dash. Tech stocks like Apple, Google and Microsoft were safe bets in 2020 too. As always, it’s important to consult with your financial advisor before deciding where to invest.
Set up a Trust or Family Office
If you haven’t already, now is the time to think about setting up a family trust or family office. A family trust can help you avoid probate, avoid or delay taxes, and ensure that your money will be properly managed after you are gone. If you’ve got over $100 million in investable assets, you may want to consider a family office instead. A family office is a privately held company that not only handles wealth management for ultra-high-net-worth investors (UHNW) but also accounting and payroll, legal affairs, and philanthropy, among other tasks.
Contribute to a Charity
Among the grief we’ve suffered the last year, we’ve also seen how people can band together to support a cause such as Black Lives Matter or to feed people left hungry due to the pandemic. We’ve seen how an infusion of capital can help speed the development of necessary vaccines that will help to put an end to the suffering and get us all back to work. There’s still plenty of work to do so even though the deadline for charitable contributions ended at midnight on the 31st of December, consider what contributions you can make this year. Philanthropy is not only good for the soul, it’s good for your wallet as well. Get a jump on 2021 and ask your financial advisor about the tax breaks available to you this year.
Lee Sherman is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Lee is an experienced journalist and editor with over 30 years of expertise with a significant history of writing in the personal finance and technology arenas.
