FINANCIAL HOUSEKEEPING | Clear out the financial paperwork
Now that 2006 is over, you can pare down your financial files to keep only the paperwork you will need for the future.
In many investment accounts – particularly for mutual funds – your December statement shows all transactions for the year, meaning it has all the information you would need to keep for tax purposes, allowing you to shred the papers you got over the preceding 11 months. The same goes for check stubs. Generally speaking, the last one of the year has all the data needed for tax purposes. Your own canceled checks should wind up in the shredder, unless they have some value come tax time.
When in doubt, put each piece of paperwork to the following test: 1) Have I ever needed this type of information before?
2) What am I keeping it for?
If there’s no tax reason to hold the document, and you can’t envision needing it – or if a replacement copy is available in the unlikely event you do – toss it.
SHORT COURSE | Limit order
A limit order is an instruction to a stock or commodities broker to make a purchase or sale at a specific price. The trade is executed only when the security hits the target price.
If, for example, Widget Co. trades for $11 per share and you place a limit order to buy 100 shares at $10, the broker won’t make the purchase until the price drops $1. Unless that happens – possibly within a specified time period – no trade occurs.
If you buy the stock, you might then place a limit order to sell at $15 per share, a directive triggered only when Widget stock reaches that level. A stop-loss order tells the broker to sell the security at a level below the current market price, offering protection in the event the stock or commodity price starts falling.
