GOOD TIME OF YEAR TO TAKE STOCK OF INVESTMENTS

Dec. 1, 2010 – Jack Sirard contributing writer

With the New Year still fresh in our minds, it’s a great time to take a real look at all your investments.

Most – but unfortunately not all - people have a pretty good idea of what they own in the way of stocks, bonds and CDs. But when it comes to their 401(k) or other retirement plan or even their insurance coverage, they often don’t have a clue.

So if this year you’ve made it your New Year’s resolution to improve your financial bottom line, there’s no better place than knowing what you have right now – and why.

For instance, if you’re an investor who covets income from their portfolio, in years past you may have invested in any number of stocks that sported a handsome yield of 5 percent or more.

But be warned that in recent recession, many companies either trimmed their quarterly dividends or dropped them altogether in an effort to conserve cash. Financial stocks in particular slashed their dividends dramatically.

So had you chosen to buy stock in a company like Wells Fargo, Bank of America or Citigroup, you might be surprised to see how low their yields are today. Wells Fargo’s yield is a paltry 0.7 percent…and it’s the best of the lot. BofA common stock yields just 0.3 percent after cutting its quarterly payout to just a penny a share and Citigroup no longer pays a dividend at all.

While that’s certainly not good news for investors, there could be a dramatic change ahead for some of them.

That’s because many financial institutions want to raise their dividends, but have held back due to government intervention which essentially told the banks that it had bailed out to conserve their capital and not reward their shareholders during the crisis.

Among those now indicating that they want to boost their dividends are both BofA and Wells Fargo.

So your bottom line is that you have to pay attention to each and every one of your stocks and bonds. Individual stocks and bonds are one thing, but mutual funds are quite another. Fortunately the funds are required to publish information on their performance, holdings, etc. But you have to read it to make sure that the investment is still what you thought it was when you first bought it.

And that’s particularly true with your 401(k) plan which in most cases invests in a variety of mutual funds. You should take the time now to look over your asset allocation of stocks, bonds and money market funds in your 401(k) as well as looking at the various funds that you are trusting your retirement to.

Finally, the start of the new year is the ideal time to make an appointment with your insurance agent to review your coverage. You need to ask him or her at least these two essential questions: What exactly is covered and what is not covered on your car and home insurance.

You might also want to ask for recommendations on where to beef up your coverage or where you might be able to save some money by raising your deductions. The review won’t cost you a cent and it could save you thousands of dollars in the long term.

Jack Sirard is a retired nationally syndicated financial columnist and is a writer for Senior Softball-USA.