| 3) Determine changes that should be made in your portfolio and put those plans into action. I caution people not to keep more than 2%-3% of their net worth in any individual position. If it's an investment fund like a mutual fund or exchange traded fund (ETF), it's fine to go beyond these recommendations because these funds are diversified. But having too much in a single stock is just too much risk. Believe it or not, there was a time that Enron was viewed as a fantastic investment. There are plenty of tales of people who lost most of their net worth because they had it all in company stock. Read This Story: Lessons From The Worst Stock Crashes Ever As I noted above, I have two positions that have grown to be above 5% of my net worth. I set a plan into motion to reduce that back to a more conservative number. That can involve just selling them outright, but I prefer a different approach. In my case, I started selling short-term covered calls against these positions. As I am waiting for these positions to be called away from me (at ~10% above their current price), I am collecting premiums on them. It's essentially like boosting the dividends on these positions, albeit at the risk that they may decline in value and are not called away. In that case, I will just keep selling calls until they are. 4) Search your portfolio and your budget for money that is inefficiently allocated. All of us have money that can become inefficiently allocated over time. Maybe it's a $5,000 car loan with a 5% interest rate while at the same time $5,000 is parked in a no-interest savings account. There's a potential guaranteed 5% return. Pay off the loans as long as you can do so and still maintain an emergency cash cushion in place. Check your car and homeowner's insurance to see if maybe you can get a better deal elsewhere. Personally, my January review revealed that I had let some cash built up in a non-interest bearing account. I transferred that amount to my Fidelity Brokerage account where it will at least generate some interest. It will earn me about $500 more this year than if I hadn't moved it, while serving as my emergency cash fund. 5) Get those tax documents together and make any final IRA contributions before April 15. My hyper focus on personal financial matters lasts from January until my taxes are done. During this time I am receiving tax documents, reviewing all sources of income and any potential deductions, and determining whether to make any final retirement contributions (some of which can be made right up until the tax deadline of April 15). Once your taxes are done, adjust your withholding as needed. It might feel nice to get a big tax refund, but you would be far better off reducing your withholding and investing that money during the year into the market. That's a better prescription for building long-term wealth. Editor's Note: As you can see from the above article, Robert Rapier is a source of valuable investment acumen. But he's not the only expert on our staff who can help you make money. Consider our colleague Jim Fink. Jim Fink is chief investment strategist of Options for Income, Velocity Trader, and Jim Fink's Inner Circle. Over the past 50 months, Jim's trades have racked up a "win rate" of 84.68%. That's unheard of for most investors, in any asset class. In fact, Marketocracy, a company that audits the performance of top investors, says that "a winning percentage of 66% would be excellent and would rank among our best investors." Jim's win rate is well above that figure of excellence. Want to learn the details of Jim Fink's next trades? Click here now. | 
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