Contributed by Norbert Fullerton, Actuary & Financial Consultant

The first few months of the calendar year can be the busiest, as savers and investors look to sort out their finances and maximize investment gains. Below, is the final of the three-part ‘personal finance tips’ series where I outline some steps that people can take to get a better grip on their finances in 2013.

Ingredient 1: Dont put all your eggs in one basket. This old-time saying applies to investing too.  You don’t want to over-rely on any one asset class (e.g. property, stocks or bonds) or any one company’s stocks to generate positive investment performance for your portfolio.  Spread across various asset classes where possible.  Holding a good mix in a range of global stocks, cash, global property, corporate bonds, treasuries, commodities and so on will help protect your portfolio from a poor performance in times of financial market stress.

Ingredient 2: Review your asset allocation. How you allocate your assets can make far more difference to overall returns than stock selection or market timing. Therefore, you should check your asset allocation regularly as market movements may have altered it.

For example, if you had half of your portfolio in stocks and the other half in bonds at the start of 2012 and your stocks underperformed your bonds, then by the start of 2013 it is possible that 60% or more of your portfolio would be in bonds – even if you had not traded at all during the year.  If this position is not what you want, then taking time to shift it back to 50/50 might be suitable.  Remember, speak to a financial advisor for help if needed.

Ingredient 3: Avoid overtrading. Most private investors do too much trading, which raises costs and risks. Investors should adopt a medium to long-term buy-and-hold approach to investments so that they don’t waste money on charges or spend long periods out of the market. Trading costs can easily erode any investment gains.  Ensure you check the charges – such as annual management fees, initial investment costs and so on.

This ends the three-part series. Here’s wishing you great financial success for 2013 and beyond.

What is your money management recipe? We invite you to share your ideas in the comment box below?


Investors should take advice from their own independent advisor(s) before making an investment decision and should be aware of local laws governing investments. Neither the author nor any other person or unit belonging to Food for the Soul, nor any of its officers, directors or employees accept any liability or responsibility in respect of the information or any recommendations expressed herein. Remember, the value of your investment and the income from them may rise or fall and is not guaranteed.  You may not get back the amount originally invested.  Past performance may not be indicative of future results.