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Article was written by Pat Garrett, December 2, 2020 in the MoneyMag

For many, Christmas will be the perfect antidote to a monumentally challenging and unprecedented year: a time that we are hopefully able to spend time with family, and for giving and receiving, for gratitude and reflection.

For others, myself included, Christmas will be bittersweet. In 2020, I missed both the Fourth of July and Thanksgiving celebrations in the US for the first time in my life, and it’s tough to know that I will also miss Christmas there with my close family, including the generation above me, who are in the latter stages of their lives.

That’s a reminder that the most important gifts we can give and receive this Christmas are intangible – a measure of stability, confidence, optimism and the ability to make up for the time we feel we lost in 2020. But, of course, these aren’t things that can be wrapped and placed under a tree.

So how do we share and embrace these important intangibles in an uncertain world? The only thing we can do is control what we can control. From a financial wellness perspective, taking time to reflect on your investments could be the best way to give yourself and your family a gift that will grow in the years ahead.

With that in mind, here are three steps you can consider that may help your investments in 2021 and beyond:

1. Review your investment strategy

When markets are highly volatile, as they were earlier in the year, it can be tempting to make emotional decisions or abandon your long-term strategy. Whether you made changes throughout 2020 or not, it’s a good idea to consider whether your investment strategy remains appropriate, particularly if your circumstances have changed.

Are you comfortable with the amount of risk in your investments? Have you reduced your working hours, or changed your view on when you might retire?

These are all questions that could influence your long-term investment strategy, and how you allocate investments across growth and defensive asset classes.

2. Make sure your investments are well-diversified

2020 has shown us that the world can change a lot in 12 months. Some of Australia’s most beloved blue-chip companies have taken an unexpected hammering, while up-and-comers such as Afterpay and Zip have surged as the retail landscape moved online.

Similarly, whole asset classes have bounced up and down throughout the year – while Australian and international equities have had a particularly bumpy ride, few sectors have been unaffected by COVID-19.

A well-diversified investment portfolio can help buffer the impact of volatility and may help you sleep better at night. Exchange-traded funds (ETFs) can be a great way to introduce diversification into your portfolio if you’ve concentrated your investments on shares and cash in the past. You could also consider a robo-advice service for part or all of your investments.

3. Review your investment costs

If your investment costs are high, they can very quickly eat into any returns you might receive. Make sure you feel comfortable with the amount you’re paying for any investment assistance or management you receive, and that it represents value for money.

That said, seeking financial advice can provide significant benefits, particularly if your investments or financial situation are complicated.

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