4 Brokerage Account Moves to Make at the Start of 2023

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Check these off your list for a successful year as an investor. 

Many people use the start of a new year as an opportunity to get their financial house in order. And so if you have money in a brokerage account, it’s the perfect time to give that account some extra attention. Here are a few key moves to make in that regard.

1. Check up on your balance

Checking your brokerage account balance isn’t something you should do on a daily or even weekly basis. But it’s a good idea to have a sense of what your portfolio is worth. So if you haven’t peeked lately, take the time to note what your balance looks like.

That said, don’t panic if you’re not so thrilled with the number you see on screen. A lot of people lost money on investments in 2022 because the stock market had a rough year. So if your portfolio is now worth less than it was a year ago, it doesn’t mean you made poor investment decisions or did anything wrong. And it doesn’t automatically mean you need to make changes to your investments, either.

2. See if your assets are evenly balanced

It’s generally not a good idea to invest heavily in one specific asset, or one specific sector of the market, at the exclusion of others. Rather, your goal should be to have a diversified portfolio. Doing so could help you not only grow wealth, but minimize your risks during periods of market volatility.

The start of the year is a great time to see how your assets are spread out. If you see that you’re heavily invested in one type of stock, you may want to do some rebalancing. (Granted, it’s usually better to rebalance during periods when stock values are up, not down, but if your portfolio desperately needs an adjustment, it may be worth making one now.)

3. Decide how much you want to invest each month

The beginning of the year is a good time to commit to investing regularly. Take a look at your budget and figure out how much money you can afford to part with for investment purposes. And then make sure to stick to that budget so you’re able to stay on track with your investment goals.

4. Figure out if your brokerage account should take priority over your IRA

The upside of investing in a brokerage account is that your money isn’t restricted. You can cash out assets at any time without being penalized (you may be subject to capital gains taxes if you sell investments at a profit, but that’s not a penalty).

IRAs, on the other hand, come with strict rules that penalize you for removing funds prior to age 59 1/2. That’s because these accounts are supposed to be earmarked for retirement, and the IRS wants to motivate savers to leave their money alone until they’re older.

But IRAs also come with tax benefits that regular brokerage accounts don’t. For example, with a traditional IRA, your contributions are tax-free. Put $5,000 into one of these accounts, and that’s $5,000 of income the IRS won’t tax you on. So if you’ve only been funding a traditional brokerage account and not an IRA, you may want to reconsider for 2023.

It’s always a good idea to carve out time to focus on your brokerage account. Do so at the start of 2023 so you can set yourself up for success.

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