INVESTING A New Year and a new look at your portfolio

Make it a resolution to get a handle on retirement accounts.
NEW YORK (AP) -- Giving up smoking, getting into shape and conquering household clutter may be more popular New Year's resolutions, but financial planners say the beginning of the year is also a good time to think about tending to your finances.
If you haven't given your portfolio a checkup since the stock rally began in March, early in the new year is a good time to make sure you've got the right stake in equities. But if long-term growth is your goal, advisers say you should never make decisions based on temporary market conditions.
"Earlier this year when the market was looking so bleak, a lot of people bailed out of stocks, and that was a mistake," said Eric Tyson, a former financial counselor and author of the "Investing for Dummies" guidebook. "I am always banging the drum, saying 'Guys, you buy stocks when everyone else doesn't want them, when they're cheap!' And now they're not so cheap anymore."
Experts say your age should drive the way you balance long-term investments, such as retirement accounts like your 401(k). According to one formula, you take your age, subtract it from 110, and then put that percentage into stocks. For example, a 30-year-old would put 80 percent in a variety of stock mutual funds and 20 percent in fixed income, with the ratio gradually shifting to a more conservative mix over time.
Getting guidance
If you're not certain how to allocate your money, many fund companies and retirement plan sponsors have online questionnaires to help you determine how to invest your assets.
"I know sometimes people are influenced by something they hear on TV, or from a friend, but it's not wise to make decisions based on things like that," said Diane Maloney, president of Beacon Financial Planning Services in Plainfield, Ill.
The stock portion of your holdings should include a diverse mix of small-, mid- and large-cap companies, and domestic and international stocks. Once you determine the proper mix, you can take a closer look at your investments. For those who rely on mutual funds, the first of the year is an appropriate time to do this because funds will be reporting their year-end results.
Accounting for taxes
It's important for tax reasons that you make changes to your holdings after Jan. 1. If you do it before the end of the year, you risk having to pay capital gains taxes on distributions a fund made earlier in the year -- shareholders of record at the end of the year can still be liable for those taxes. However, this isn't a factor with retirement accounts, as taxes are deferred on those investments until you withdraw them.
"A fund that might not do well one year is not necessarily one to trash, but one that hasn't done well for three to four years, that might be a sign you should find something better for yourself," Maloney said.
One way to see how your fund has performed against the various market indexes is to look on www.ishares.com. Looking over a fund's prospectus is also a good way to get a picture of its performance and recent history, though many investors skip this step.
Best bet
Although the mutual-fund industry has gotten some negative publicity lately, it's still the best investment for most people, Tyson said -- as long as you choose your fund family carefully.
"You have a day job, whether you're a nurse or a janitor or whatever, but whatever it is you do for a living, it ain't managing money," Tyson said. "Mutual funds are so inexpensive, you go to a place like Vanguard, and for less than half a percent a year a team of professionals will be making the decisions for you. Why would you want to do it yourself?"