Wednesday, October 27, 2021

Just Follow the Recipe




Darcie Guerin

Welcome to “Investment Insights,” a new column designed to coordinate the pieces of your financial life and provide observations about financial markets. I hope that you will pick up a few actionable ideas intended to increase your financial well-being and provide peace of mind.

As I entered college in 1978, my grandmother was certain that majoring in my chosen field of economics, rather than home economics, was a huge mistake for a woman. Nothing against Grandma, it’s just that she was from a different generation. She had never drove a car or written a check let alone considered a career in finance. Today, I clearly see a similarity in the two fields of study and that is the importance of following a prescribed outline or recipe, whether it’s for cooking or getting your financial house in order. The start of a New Year provides the perfect time to get started.

Here are the first six of twelve suggested resolutions that if followed, will go a long way toward helping you achieve your financial goals.

1. Get your balance sheet in order. Identify the value of your assets including equity in your home, savings, retirement, and brokerage accounts, as well as any other property you own. Next, list liabilities, including mortgages, loans, credit card balances, and any other debts. Finally, review expected and anticipated income flows, and expenses required to maintain your desired lifestyle. If you’re already retired, you also need to know if the income you receive from Social Security, pensions, retirement plan assets or other sources is still going to support your current way of life. Everything else hinges upon this information so take the time to bring these numbers up to date.

2. Review your budget and spending habits. This one is relatively simple, but not necessarily easy; income and expenses need to match. If cash flow monitoring was off-track, determine how and why that occurred. Determine if there was a onetime change in circumstances or if your situation has fundamentally changed. You can always trim some expenses even when others are fixed. Another tip is to consider zero-sum budgeting which is how many corporations operate. In other words, the $2500 spent on travel last year would have nothing to do with this year’s travel budget. Instead, zero out each expense and reevaluate each year. By realistically reviewing income and expenses, you can assign dollars accordingly while maintaining a degree of flexibility rather than operating randomly.

3. Review the titling of your accounts. Banks, brokerage, and other accounts are often opened based on a current situation and need. When things change, and they will, there can be problems. The correct titling of assets can be challenging, so be sure to consult an estate-planning attorney for advice. In fact, titling has implications across a wide range of estate planning issues, as well as other situations such as Medicaid eligibility, special needs qualifications, and borrowing power, to mention just a few.

4. Designate and update your beneficiaries. Outdated designations can result in unintended consequences. Have you provided for the possibility that your primary beneficiary may pre-decease you? If something changes in your life such as divorce, remarriage, birth, or deaths, it may be necessary to review your beneficiaries.

5. Evaluate your cash holdings. Everyone should have a certain amount of his or her assets set aside in a cash emergency reserve. These are funds you can access quickly and easily to cover special situations. The right amount is unique to your circumstances. To determine the figure you are comfortable with, review cash flow and income sources.

6. Revisit your portfolio’s asset allocation Market volatility may be here to stay. The question is whether you are comfortable with your portfolio’s level of risk. Again, asset allocation is a highly individual decision, based on your net worth, age, income needs, financial goals, and many other considerations. The events of the past few years have made many investors more risk-averse. This is not a “one size fits all” proposition, review your holdings and make sure allocations match your needs and temperament. If they don’t, make any necessary adjustments, and always make sure you’re making informed decisions. In addition, remember, asset allocation doesn’t guarantee a profit or protect against a loss.

The next column will address resolutions seven through twelve. In the meantime, your future financial health depends on what you do now. Resolutions only work if you follow them. The secret to success is to get started. The results are worthwhile, and you’re worth it. Stay focused and invest accordingly.


Darcie Guerin, CFP®, is Associate Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at 239-389-1041, email


This information is general in nature, it is not a complete statement of all information necessary for making an investment decision, and is not a recommendation or solicitation to buy or sell any particular investment. Investing involves risk and the possible loss of principal invested. Investing involves risk, and investors may incur a profit or a loss. There is no guarantee any particular investment strategy will be successful. Opinions expressed herein are those of the author and subject to change at any time. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame logo), which it awards to individuals who successfully complete initial and ongoing certification requirements. Diversification and strategic asset allocation do not ensure a profit or protect against a loss.

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