Just because the stock markets have finally turned around, that's no excuse to make the same mistake that too many investors made in the late 1990s - putting their investments on automatic pilot.
It's time to make some New Year's resolutions that won't do anything for your cholesterol levels but may give you a better night's sleep.
First off, ask yourself when was the last time you talked to your financial adviser.
, senior vice-president at TD Waterhouse, thinks it mighty strange if you didn't hear from that person for all of this year.
"You don't want to deal with an adviser who you only hear from in good times," she pointed out.
"It doesn't take anything to move to someone who will pay attention to you."
Having re-established contact, resolve to find out where your money is.
You're not alone here if you don't know. Too many investors have a habit of using the shotgun approach to investing, which can severely try the mind in trying to remember where your hard-earned savings are.
"Invariably, if one of our investor consultants goes out to meet with a prospect, they will find that the person has mutual funds, they're scattered all over the place," said Dave Ablett, manager of advanced financial planning support at Investors Group.
"The client hasn't really looked at them, all they know is they got some mutual funds. They don't even know whether the mix of the mutual funds is appropriate."
Study your statements and the reports from the mutual fund company you deal with. The details are there. If you still can't make heads or tails of where your money is, ask.
Once you've refreshed your memory as to where your investments are, you will want to ask yourself if the balance is correct.
Even a year ago, when markets were a lot more shaky than today, it made perfect sense to have your investments split along the lines of 50 per cent in equities or stocks, 40 per cent fixed income such as bonds and 10 per cent cash.
However, with this year's stock revival, it may make a lot more sense to up your equity portion to, say, 70 per cent.
But don't go to extreme lengths.
"My concern is that many are saying, 'It's time to get back into equities with everything'," said Ms.Lovett-Reid.
"That's the over concentration happening there as well."
With the end of the year fast approaching, you will also want to think about tax implications of your investments. If you're doing this sort of heavy lifting on your own, you might want to consider getting some help in preparing your taxes.
"I use a pro," Ms. Lovett-Reid said.
"While I understand a lot of the tax implications, I want to make sure I haven't missed something. It's about doing a lot of little things right."
Hiring a pro doesn't mean you have to spend a lot of money on a first-class accountant. Even going to a professional tax-preparer will help since "hopefully they will be asking the right questions," Mr. Ablett said.
For example, "any time you see somebody with children and both parents are working, immediately they should be asking the question 'what about child-care expenses'?"
And in assessing how your investments did over the last year, think after-tax and expenses.
"When you look at investment returns, recognize that not all income is treated equal. So when people say I just made a thousand dollars, think in after-tax dollars because that's what you're putting in your pocket, and interest income, dividend income and capital gains will all be treated differently," Ms. Lovett-Reid observed.
Also, remember that in all likelihood you're paying annual fees to your mutual fund company.
Finally, maybe you don't even have a registered retirement savings plan. If that's the case, maybe this is a good time to re-examine your reasons for not setting one up.
"Unfortunately, what happens is that a lot of people, some have read articles which kind of imply . . . you're dumb to contribute to RSPs," said Mr. Ablett, noting that people then wrongly assume the Canada Pension plan and old age security will provide enough income.
He also pointed to arguments that benefits will be clawed back.
"In some few instances, that might apply, but for the vast majority of working Canadians, it doesn't."
© The Globe and Mail
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