We're coming to the end of January, right about the time that New Year's resolutions are being conveniently forgotten.
Even before the recession, improving money management was a common goal with each passing year. Now with the slow recovery still lingering, it has taken on greater importance for many people.
But will those resolutions fail? The Herald-Leader spoke with two prominent Lexington money managers and got their advice on what you can do this year to succeed in growing your investments.
For those of you who didn't resolve to better manage your money, you have plenty of time to decide that. After all, said Nancy Barron II, founder and president of Nancy Barron & Associates, plenty of folks with resolutions don't even come to see her until February.
"That's when their New Year's resolution to go to the gym has faded," she said, laughing. "Then they get around to us."
"The most important thing is, the goals have to be realistic," said Dale Ditto, financial consultant with the McIntosh-Ditto Wealth Advisory Group of Hilliard Lyons.
Ditto said it's important in the case of shared finances that both people buy into any goals. Those goals should be worked up into a strong plan to put in place.
"It's one thing to say I want to get out of debt this year," he said. "But it's totally another thing to figure out how you're going to do it and be disciplined enough to implement the time."
Barron said people should have realistic goals about what they can earn and expect of their investment managers.
"Last year was an extremely volatile year," she said. "After all the ups and all the downs that made everybody crazy, ... we were basically flat even.
"Nobody knows what's going to happen."
Barron said she often asks people new to her business whether they're leaving another broker "because they think we have all the answers."
"I tell them the market was the same for all of us last year," she said.
Barron encourages clients to use retirement funds for investing because of the "painless" nature.
"If you put it in every month and you don't try to time the market, it works best," she said. "The stock market is not a one-year proposition.
"It's a five-year proposition, and I'm starting to think it's a seven-year."
Ditto said he often finds that "people want immediate gratification, and they're not willing to do without things that they need to do without in order to get out of debt and be able to save and invest."
He said, "If it's not long-term money, I won't invest it for people."
"Because over the short term, we don't know for sure what the market will do," he said. "Over a three- to five-year period or longer, things will work out well.
"People have to have a long-term perspective in order to be able to invest in (stocks) because they fluctuate greatly."
Invest in stocks
Despite the fluctuations, Barron said, those resolving to improve their finances need to focus on stocks and not get too nervous during the swings.
"Without stocks, you would be lost," she said. "No one can make any money putting money in CDs or bonds.
"Even older people need the stock market."
Barron said she puts all her own money in stocks, emphasizing that interest rates are so low now that it's not likely that bond values will rise due to further rate cuts.
Barron and Ditto emphasize the need to diversify your holdings as part of any changes you make this year.
"If you diversify and keep investing and keep doing it regularly, you will prosper," Barron said.
Oftentimes, that prospering is what can get some people to stop thinking so much about their finances, she said.
"If the market gets better, all of a sudden you're not that interested in it anymore," she said. "Most people just want to think they have done the adult, mature, right thing.
"After that, they start to lose interest with it."
But if along the way, investment managers can help their clients, that's the best reward, Ditto said.
"I love the work I do for people," he said. "It's fulfilling for me to see us put together a financial plan that works."