Cutting Credit Cards with Care

While I am no Marie Kondo, I sometimes feel the need to straighten out the clutter on my desk. I definitely operate more efficiently when my office is neater.

Having less clutter in your financial life can be useful as well. Multiple bank accounts, brokerage accounts, and credit cards can accumulate over time for no particular reason. This collection of accounts often serves no purpose other than to create paperwork and confusion.

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When the Present Obscures the Future

We enter 2019 with a lot of volatility in the stock market, just as we did in January 2009. Presently, the world economy appears to be slowing down. But the current situation is nothing like the economic jolt that occurred 10 years ago. We've been experiencing a recovery since then that was hard to anticipate at the time.

Market downturns happen. While acknowledging the pain that losses may cause, the current situation can be viewed as a "bright, shiny object" that prevents us from focusing on our long-term investment goals. Diversification can help us ride out the storm in the interim. Take a listen.

Musical Treat

Here's a favorite from the Moody Blues "Days of Future Past" -- a live version of "Tuesday Afternoon." The year 1970 clearly had a different look to it.

How Diversification of Your Portfolio Works in Practice

The benefits of diversifying your portfolio may be better understood by highlighting its practical application. A client of mine wanted to withdraw a decent amount of money from her account for home repairs. The client needed the cash immediately, which was not fortuitous given the drop in the stock market. Instead of selling stock mutual funds while the market was down, and locking in the recent losses, the client tapped into her bond mutual funds that have held up nicely.

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