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Get Your Retirement Account in Shape   


Happy New Year! Maybe you’ve made a promise to yourself to get in shape (and even join a gym) in 2017. Why not get your retirement account into shape as well? To help, here are three common mistakes to avoid.


Not using the right equipment

Many retirement investors, particularly new investors, shy away from stock investments. The stock market can be volatile, and you don’t want to assume more investment risk than you feel reasonably comfortable with. However, if you don’t include stock investments in your account, you’ll miss out on the opportunity to potentially have a greater account balance at retirement. While past performance doesn’t guarantee future results, historically, stock investments have outperformed bonds and other fixed income investments over the long term.

Overdoing it

One way to help manage investment risk is to diversify your account investments among the various choices your retirement plan offers.* That way, if one type of investment is performing poorly, other investments that are doing well may be able to offset investment losses. But look at your retirement plan’s investment choices carefully. Some may hold the same investments as others. If you aren’t careful, you could end up duplicating investments and fail to adequately diversify your portfolio.

Not consulting a trainer

Some retirement investors become overconfident and think they have all the information they need. Market statistics, news reports and information from your retirement plan all have their place. But they can’t substitute for a one-on-one consultation with your financial professional. He or she has the big picture of your financial situation and can help you coordinate your retirement investments and risk management strategies with your other investment goals.

* Diversification does not ensure a profit or protect against loss in a declining market.