KEY TAKEAWAYS

  • The new year can be a great time for investors to check in on financial goals and to make changes.
  • Advisors recommend building robust emergency savings and examining your portfolio in the context of your timeline.
  • They also suggest creating a debt pay-off plan, considering tax implications, and thinking of predictable middle-term expenses.

As the new year kicks off, Investopedia sat down with three financial advisors to find out what investors should be thinking about in 2024.

1. Emergency Savings Are the First Step

One sentiment that all three financial advisors echoed was that having emergency savings set aside is essential and should be prioritized ahead of other investment and savings goals.

In 2023, inflation affected not only people’s spending but also their savings.

“Ensure you have enough saved for emergencies. It’s a good rule of thumb to have about three to six months of living expenses in an emergency savings account, to be used in the event of a major expense or job loss,” Ashley Kristine Rittershaus, a certified financial planner (CFP) and founder of Curious Crow Financial Planning, told Investopedia.

“When the unexpected happens, a solid emergency fund means you’re less likely to need to pull money out of investments or rack up debt to cover it,” Rittershaus added, highlighting the sometimes-overlooked value of an emergency fund for investors looking to shore up the resilience of their portfolio as they grow their wealth.

2. Align Your Portfolio With Your Timeline

Create a savings and investing plan that works with you and your goals. Consider which upcoming life events could require accessible cash and try to predict when they might occur.

Important factors when creating this plan include making sure “your portfolio is invested appropriately based on when you will need the money and the amount of risk you can tolerate,” Rittershaus said, explaining that “money for a down payment on a home in two years, savings for college in seven years, and a retirement account needed in 30 years will all likely be invested quite differently” and should be reflected in your asset allocation.