The tax code has changed. Should your investment strategy?

By January 29, 2018 February 7th, 2018 Investing, Tax Planning

Republicans enacted dramatic changes to the federal tax code in late 2017. Income tax brackets were lowered, and the personal exemption and deductibility of interest on home equity lines of credit were eliminated. The standard deduction was doubled and limits were placed on the deductibility of taxes paid in income and property taxes to the states. The impact on your taxable income will depend on your specific circumstances and your tax professional may recommend certain strategies to reduce your tax bill going forward.

Given all of that, should you also make changes to how you’re investing your savings?

The short and sweet answer is “No!” Why? Because the surest way to grow your savings and retire with more is to

  • Build a globally-diversified portfolio of stocks, bonds, real estate and commodities using low-cost ETF’s;
  • Rebalance periodically;
  • Ignore the hype and resist the urge to follow the herd into this “winning” company or sector based on some piece of news.

Why? Because trying to “time the market” and pick the “winners” and “losers” has proven time and time again to deliver inferior returns.

So when should you revisit your investment strategy? When something changes in your personal life that affects your savings goals, time horizon and/or risk tolerance.

Eileen McPeake

Author Eileen McPeake

More posts by Eileen McPeake