FINANCIAL HOUSEKEEPING | Calculate your net worth
One annual financial task that many people think is best done at year’s end is measuring your net worth, which is the value of everything you own minus the value of everything you owe.
While it sounds like a lot of work, basic bills and investment account paperwork – plus a good online net-worth calculator – make quick work of the process. Ideally, individuals will see their net worth climb over time; whichever direction their worth is moving, it gives them a clue on how they might want to change spending and saving decisions.
Kiplinger’s Personal Finance magazine has a fast and thorough net-worth calculator on its website. Visit www.kiplinger.com/tools/networth.html.
SHORT COURSE | January barometer
The January barometer is a market-forecasting theory that was popularized by the “Stock Traders Almanac,” which holds that the movement of the Standard & Poor’s 500 during the month of January sets the direction for the market for the entire year.
That means that if the stock market, as measured by the S&P 500, is up during the month of January, the stock market would be expected to rise for the rest of the year.
An investor truly committed to the January barometer’s effectiveness, therefore, would only invest in the market during years when the barometer forecasts an upturn. While history shows that the January barometer has correctly predicted the market’s annual direction about two-thirds of the time, most observers do not think that makes it worth following, as investors miss significant growth opportunities by sitting on the sidelines during the times when the forecast is wrong.
