5 Investment Moves to Make at the beginning of the Year

A new year, a new you? Most likely not.


You’re the person you were last year, which is one of the revelations that will probably occur in 2023. Investment moves remain the same from one year to the next. However, provide us with at least additional opportunities to get them right.

Here are five investment moves to make right away and at the start of each year.

1. Build Your Cash Reserves

In 2023, stocks are still the best option. However, do not anticipate a market performance similar to that of 2022. Cash is the default option because there is no real way to offset stock-related losses with other assets. Building up cash reserves may be the best investment move, with markets ending 2022 in record territory. Although the returns won’t be great, you’ll be more equipped for what comes next.

Investment Moves to Make
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2. Update your budget

According to Brian Bender, director of Schwab Retirement Plan Services, the new year is an opportunity to think things over and start over. “That ought to cover your financial strategy,” Bender advises compiling notes of any significant expenses you expect to incur in the upcoming year, such as a potential move, impending marriage, or expensive trip. He advised that you account for these expenses in your budget and prepare for them. Similarly, you’ll want your new budget to account for any job changes or expected raises.

Review your recent purchases to know how much you spend, advised Kimberly Palmer, a personal finance expert at NerdWallet. From there, Palmer advised, “you may develop a rough estimate of where you want your money to go.” The 50/30/20 budget, which divides “50% of your take-home pay toward needs, 30% toward wants, and 20% toward savings and debt,” is a helpful guideline, she continued.


3. Review your emergency savings

According to Cristina Guglielmetti, president of Future Perfect Planning in Brooklyn, one of the best ways to sleep well at night is to have a healthy emergency savings account. According to Guglielmetti, different people require different amounts of money to be set aside. The beginning of the year is the ideal time to determine how much is suitable for you.

Start by figuring up your essential monthly expenses, such as rent, food, electricity, and pet care, and then choose how many months you want the account to cover if you lose your job. (Such cash would also be helpful for a one-time emergency, like an unanticipated auto repair or a sudden medical need.) Guglielmetti added, “It could be low, like one to three months, especially if there are additional savings accounts to draw from, the potential for family support, or if one or both employments are relatively steady.” “Or, if someone just desires that level of safety, it can go as high as nine to 12 months.”

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4. Pay down or Pay Off Debt

Whether the economy improves or worsens in 2023, the events of 2022 should serve as a lesson learned. Tens of thousands of people lost their businesses, millions of workers lost their jobs, and the stock market went down.


The point is life is unpredictable. At the beginning of a year, the stock market might be at record highs, housing prices rising, and unemployment at a record low. The general assumption at the beginning of the year would be smooth sailing ahead.

Paying down or paying off debt will be one of your best investments if the upcoming year turns out to be even more unexpected than before, which is conceivably true. If your career or business is in peril in the forthcoming year, you cannot afford to hold credit cards with 20% interest rates or even a low-interest home equity line of credit. In addition, paying off a credit card with a 20% interest rate will be like locking in a 20% investment return for several years.

It’s not just about planning for the worst when you pay off or reduce your debt. It’s essential to prepare for the best-case scenario as well. The less money you owe, the simpler it will be to start a side business, enhance your retirement savings, or make any of the investments discussed in this article. Getting out of debt is a means to improve your readiness, much like setting up cash reserves. Whether you’re getting ready for a storm or starting a new business to better your future, that will work to your advantage.

5. Make sure you’re on track for retirement.

The beginning of a new year is the best time to check in with your retirement savings goals and to make any needed changes, experts say. Some people may be able to take advantage of the increased annual contribution plan limits for 401(k) workplace retirement plans ($22,500) and individual retirement accounts ($6,500), Guglielmetti said. Workers aged 50 and older can qualify to make additional “catch-up” contributions.



Everyone should understand that change is a normal part of life as we enter 2023. Additionally, though only sometimes, it can impact your financial situation. That can include your place of employment, company, and investment holdings. An attack plan is the best course of action because panicking solves nothing.

That might not entail taking drastic action. However, even making investment moves that will increase your returns, cut down on your losses, expand your capacity for earning a living (or maintaining employment), and give you better control over your cash flow can have a significant positive impact on your life in the future. 21 Therefore, put those New Year’s plans to rest and focus on making investments that would enhance your financial situation and quality of life.





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