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By Jason Stipp | 01-01-2011 06:00 AM

Benz: Top Four Resolutions for Investors in 2011

Morningstar's director of personal finance offers tips for equity and fixed-income investors in the new year.

Jason Stipp: I'm Jason Stipp for Morningstar.

As 2011 gets under way, we know a lot of investors will be checking in on their portfolios, so now is as good a time as any to make a few resolutions about how you'll be managing your investments in the New Year.

Here with me to offer some tips on that front is Morningstar's Christine Benz, director of personal finance.

Thanks for joining me, Christine.

Christine Benz: Jason, great to be here.

Stipp: So, Christine, I think around this time of year, we would say there are few key pieces of investing advice that should always be on your resolution list. What are some of those evergreen things that you should always be keeping in mind?

Benz: Right, so the equivalent of eating well and exercising for investors; that would be savings and investing as much as you possibly can, having a sensible asset allocation framework given where you are in your life, and not chasing performance. Those would be some of the key things that I would look at in terms of evergreen-type investment advice.

Stipp: Very classic investing rules, but always good to remind yourself of those.

But right now given some things that have happened in the market over the last couple of years and where we see ourselves today, there are some specific resolutions that you might want to have on your list for 2011.

The first one: Let's talk about market performance and where it's been and how that might affect your resolutions going forward into the New Year.

Benz: So stocks have had a tremendous run over the past few years now, so relating to stocks I would say your key resolution should be to take it slow. So don't pile into stocks. Don't chase the hottest-performing stock categories. Really plan to take a measured approach to stocks. When we look at the broad markets, certainly according to Morningstar's stock analysts, they see it as pretty fairly valued currently.

So, I think dollar-cost averaging makes more sense than ever right now, and also look at some of those categories that are kind of slow-lane fund and stock categories, so large-cap stocks, for example, have not performed especially well relative to small and mid-caps.

It could be worth maybe tweaking your portfolio to give it a greater emphasis on some of those categories, not just with U.S. stocks, but also foreign stocks.

Stipp: So, certainly a measured approach is a good one if nothing looks screamingly cheap right now.

On the fixed-income front, we've had some bumps in the road over the last couple of months, and I think a lot of Morningstar readers are very concerned about their bond portfolios right now. If you had a resolution for fixed income, what would it be?

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