Four things to remember while making financial resolutions in 2014

The year 2013 went down in the history as a year of change in India, not just in the world of politics, but even in personal finance management. With a number of regulatory changes as well as some innovation in financial instruments, change was the name of the game. But if had failed in keeping big money resolutions in 2013, let 2014 be the year when you make at least one change in the way you handle your money. Many begin the new year with a list of resolutions, but when it comes to your money, make just one and stick to. Firstpost spoke to a few certified financial planners as asked them what could that one new year resolution. Here is what they said:

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Hold to your equity exposure:“2014 is going to be year of many changes. With the elections round the corner, the markets will volatile. In such a time, take a two-year view and hold on to your equity exposure,” saidRanjit Dani, Nagpur based CFP.You should not sell, not even for a small profit, he says. On the contrary if possible, one should increase the equity exposure when the markets fall. But if that’s not possible, hold on to your equities through out the year.

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Stick to goals and don’t be hyper-reactive:“This being an election year, there’s going to be a flow of information from all sides. Don’t be hyper-reactive to every piece of news and change your financial goals. Stick to your financial goals,” saysPankaj Mathpal, a Mumbai-based CFP.In short, he recommend being disciplined with finances, even when there are many changes that happen politically, in terms of the market’s movement and regulatory matters.

Don’t change asset class/ allocation frequently:“No asset performs all the time,” says Suresh Sadagopan, another Mumbai-based CFP. What this means is, don’t change you asset allocation frequently. It is okay to change it a bit. Slightly rebalance the percentage of assets held in various categories to take advantage of market pricing and sectors. But that does not mean, you change your asset class every time your another asset does better. You may land up investing in it at a higher price. Moving from one asset class to another, just following the herd mentality, will hurt you in more ways than you know. You might get things right in the short term but may go wrong in the long term.

Take Action:“If there’s one new year resolution that one should make, it is “I will take action”, especially in areas of finances you have been procrastinating for a while,” saysKiran Telang, another Mumbai-based CFP. For instance, buying a critical illness plan. There are many other financial steps that get stuck in passive inertia. Resolve those tasks this year.

Happy New Year!