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Your New Year's Investing Resolutions

Christine Benz

Getting in shape may be the most common New Year's resolution--and it's frequently among the first on the chopping block. But Morningstar.com readers said they're vowing to make some financial changes in the new year, too, including tweaking their asset allocations, paying attention to tax efficiency, and prepping for retirement. A few noninvesting financial resolutions also popped up in readers' comments, including crafting an estate plan and purchasing long-term care insurance.

To read the complete thread or share your own financial resolution for 2014, click here (http://news.morningstar.com/articlenet/article.aspx?id=624424).

'A Blue-Light Special for Blue Chips Soon Coming!'
Given the strong runup in equity prices, several readers said they needed to tweak their asset allocations.

Bacholyte, for example, resolves to "add to a few volatile stock funds monthly using a value averaging schedule, and to bond positions with whatever is left over (since I'm a little light in that area for someone my age)."

Meanwhile, Tomas47's post underscores the importance of paying attention to tax efficiency. "In January I need to do the year-end rebalancing I deferred for income tax reasons," this poster wrote.

Those respondents whose plans call for higher weightings in stocks or bonds said they're determined not to overpay for merchandise.

Opined DrBobb: "I resolve not to put more money in stocks while the market is 25% over priced on a P/E basis."

Retiredgary also has the value bug, noting, "I hope to do a better job of being on the lookout for bargains and opportunities in investments."

Bking1 thinks a better entry point will surely present itself, writing, "It's a great time to have cash, and, equity markets will eventually stumble, especially after a 30%-plus run in 2013; a blue-light special for blue chips soon coming!"

But this poster is also waiting with bated breath for a correction in bond prices, noting, "I'm hoarding cash in anticipation of rolling out a certificate of deposit ladder strategy after yields begin to rise. This has been the lowest bottom for yields in generations; the runup should be steady for a decade."

For newly retired rfalcon, higher bond yields would be a welcome development. "I'm waiting for an expected buying opportunity in the bond market, which I'm hoping will occur in 2014."

Also planning to keep an eye on the direction of the bond market is Bchilds6, who's relying on Morningstar.com to provide updates. "Because the fixed-income yield is so important to retirees, I would resolve to check Morningstar for articles that show how current market situations will affect the total return of the fixed-income investments."

Knowledge acquisition is also on DBSMichigan's list of 2014 financial to-dos; this investor vows to "continue to grow my understanding of markets, economies, and trends."

'I'm Just Enjoying My Newfound Freedom'
Getting their financial houses during or in anticipation of retirement ranks high on other posters' lists of 2014 resolutions.

As Rfalcon's post indicates, transitioning to spending a nest egg after a lifetime of accumulation can be a difficult mental adjustment. "In early January I plan to make our first withdrawal, since I just recently retired, and after all the decades of saving, I'm finding the concept of taking money out of the portfolio a difficult one *grin*. . . Other than that, other than that, I'm just enjoying my newfound freedom."

Also stepping off the gas as retirement draws near is Chief K, who resolves to "spend more, save and invest less and take even more time off from work."

Zorkl55 plans to scale back on work--but not retirement-plan contributions. "I plan to cut back on my work hours and begin to enjoy the fruits of our lifelong savings and investment plan. No drawdowns this year, and I'll continue for now to contribute fully to my 401(k) Roth and regular IRAs. I will also delay taking Social Security, while assigning benefits to my wife."

Also putting Social Security filing on the backburner is Bacholyte, who resolves to "resist the temptation to start taking Social Security before sometime in 2015 (when I'll be age 66 1/2 or 67)."

Respondents said they're prioritizing other aspects of their financial plans, too. For Tomas47 and spouse, "the major task is to update our estate planning documents last done in 2009. We are holding a 'family meeting' with our kids today to get their input."

CautiouslyOpt is tackling another task that's easy to put off: "I'm going to finally start seriously exploring the land of long-term care insurance with some professional guidance, with the goal of having the right policies for us purchased by the 4th of July."

'I See No Reason to Change'
Other respondents said that they plan to focus on blocking and tackling in the year ahead.

Alpro1, for example, plans to "feed my Roth IRA to the max as always."

Other posters said they're looking for the right opportunity to convert traditional IRA assets to Roth. As Tomas47's post indicates, it's better to do so when one's IRA balance is at a low ebb than when it's lofty. This investor plans to "be patient and wait for the correction before doing another partial Roth conversion. I hope it is not so steep that I need to consider recharacterizing my 2013 conversion."

Meanwhile, Retiredgary vows to spend time on "asset location" in the year ahead. "We plan to continue working to arrange the contents of our accounts of various types (Roths, taxable accounts, and 403(b)s and regular IRAs) to fit the characteristics of each type better."

For other respondents, their 2014 goal is simple: to stick with what's working. "My resolution is to stay the course," said BMWLover. "We've been successful in meeting our goals of maximizing our contributions to our retirement plans and in generating competitive returns with less market risk, and I see no reason to change anything now. So, we'll continue to invest in high-quality stocks, preferreds, and shorter-term, investment-grade corporate bonds and avoid the risky investments that can cause you to lose sleep at night."

Alpro1 echoed the virtues of sticking with a well-laid plan. "[I plan to] stay the course of a 60-40 asset allocation and rise out the highs and lows that come my way. It has certainly worked well for me up to this point and I see no reason to change."

Ditto for ColonelDan, who wrote, "As always, I will strive to continue keeping my investment life simple, staying the course and enjoying my retirement!"

And stay the course, of course, is the philosophy espoused by Taylor Larimore. This veteran poster said he "will continue to follow the Boglehead philosophy: 1) Develop a workable plan, 2) Invest early and often, 3) Never bear too much or too little risk, 4) Diversify, 5) Never try to time the market, 6) Use index funds when possible, 7) Keep costs low, 8) Minimize taxes, 9) Invest with simplicity, and 10) Stay the course.

Corroborating the hands-off approach is yogiman, who's "promising myself not to tinker with my investments!"