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14 Smart Investing Moves to Make Before 2021 Wraps Up

Author: Maurie Backman | November 29, 2021

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Be a savvy investor

Before we know it, 2021 will be over and the new year will be upon us. And so now's a good time to start making strategic investing decisions to set yourself up for a successful 2022. Here are some moves worth making before the end of the year.

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1. Make sure your brokerage account is diversified

A diverse investment mix can protect you during stock market downturns and help you grow wealth in the long run. It's important to check on your investments periodically to make sure you're as diversified as you think you are. It could be that the value of different stocks has shifted since adding them to your portfolio so that you're now more heavily loaded in one specific market segment. In that case, a little rebalancing may be in order.

ALSO READ: 3 Breakout Growth Stocks to Buy Right Now

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2. Make sure your retirement plan investments are age appropriate

During your working years, it's a good idea to invest your retirement savings heavily in stocks. But as retirement nears, it's wise to shift away from stocks (without dumping them completely) and put more of your money into bonds, which are far less volatile. Before the year is up, take a lot at how your assets are allocated and make changes if needed.

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3. Invest your HSA if you haven't done so yet

The benefit of having money in a health savings account (HSA) is that you can invest the funds you're not using immediately. If you've yet to invest your HSA dollars, it's time to start putting that money to work.

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4. Max out your retirement plan -- or get as close as possible

The more money you put into an IRA or 401(k) plan, the more of a tax break you enjoy -- all the while getting to invest that money for the future. If you haven't maxed out your retirement plan contributions, consider ramping up in the coming weeks. You may not be able to put in enough money to meet the annual limit, but the closer you can get to maxing out, the better.

ALSO READ: 3 Healthcare Stocks That Are Too Cheap to Ignore

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5. Max out your HSA

If you haven't hit your maximum HSA contribution for the year, try sneaking more money into that account. Not only will you get a tax break on your contribution but you'll enjoy tax-free investment growth and tax-free withdrawals, provided you use your money for qualified medical expenses.

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

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6. Do a fee check in your brokerage account

Some brokerage accounts impose fees for trades or inactivity. If your brokerage charges a lot of fees, you may want to consider moving your money elsewhere.

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7. Check up on your 401(k) investment fees

If your 401(k) is invested in a lot of actively managed mutual funds, you may be losing a chunk of your money to fees. If that's the case, you may want to consider shifting some of your 401(k) investments into index funds, which are passively managed and therefore charge lower fees.

ALSO READ: 3 Hot Stocks Billionaires Can't Stop Buying

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8. Dump losing stocks to score a tax break

If you have a few specific stocks in your portfolio that are underperforming, now's a good time to unload them. The loss you take in your brokerage account can be used to offset capital gains. And if you don't have gains, your loss can also offset a limited amount of ordinary income.

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9. Take gains in your brokerage if you have the losses to offset them

If you're sitting on a big investment loss but are interested in selling some stocks at a profit, you may be able to enjoy those gains tax-free -- assuming your loss is large enough to cancel out your gains. This is a strategy worth employing if you have some stocks that have gained a lot of value but you're concerned that their price will soon start to drop.

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10. Decide if you're ready to buy crypto

Cryptocurrency has become increasingly popular among everyday investors. If you've yet to buy digital coins, you may want to consider adding them to your portfolio, and now's a good time to learn more about them.

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

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11. Invest in fractional shares

If you have a limited investing budget, you may want to consider buying some fractional shares. That way, you can own a piece of a company you're interested in without having to fork over the money for a full share. Not every brokerage offers fractional shares, so if yours doesn't and also charges high fees, it may be time to consider making a switch.

ALSO READ: 2 Monster Growth Stocks to Buy Now and Hold

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12. Buy some dividend stocks

The great thing about dividend stocks is that they offer two opportunities to make money. Not only can these stocks gain value over time but the dividends they pay you can serve as backup income or cash to reinvest.

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13. Boost your general investing knowledge

Even if you've been investing for years, it never hurts to educate yourself on different opportunities and corners of the market. If there's a specific segment you've yet to dabble in, now's a good time to learn more about it. Similarly, if you're clueless about crypto, start reading up on different cryptocurrencies to see if any are suitable for you.

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14. Get started if you haven't already

If you've yet to begin investing, the time to start is now. If you buy stocks or other assets in the coming weeks, you could set yourself up to enjoy nice profits in 2022 (though generally speaking, it’s a good idea to hold quality stocks for a long time before selling them).

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Previous

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Gear up for 2022

As you prepare for the new year, it’s a good idea to pay your investments some attention. Doing so could help you start out 2022 on a solid financial note.

The Motley Fool has a disclosure policy.

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