How to streamline your personal investments.

It’s a new year and time to treat yourself to the greatest gift of all—better investments. Making improvements to your investment accounts at least once a year can help you accumulate more money and reach your financial goals faster. So if you haven’t sat down to review your portfolios, now’s the time to get it done. Here are a handful of steps:

1. Rebalance your 401(k). Only one in six people who have 401(k)s ever change their investment mix. After you set up your 401(k), don’t ignore your retirement account, which is the most important one you’ve got. If you have the right mix of stocks, bonds and cash, you’ll do well now and have more money for retirement later. Make sure your asset allocation still matches your tolerance for risk, and make changes where needed.

2. Rebalance your other investment accounts. After examining your 401(k), check the asset allocation in your other accounts too. Don’t chase last year’s winners, especially individual stocks. Make sure your money is spread among many different asset classes and that you’re not overexposed to any one sector or market. As you approach the deadline for each goal, your investment mix should become progressively more conservative.

3. Prepare for rising interest rates. Long-term bond funds and Ginnie Mae funds have performed well for the last decade because interest rates moved steadily downward. However, when interest rates go up, bonds will lose value. Make sure the average duration of the bond funds that you own is five years or less.

Recently, listeners of my radio show have asked what they should do when five-year certificates of deposit (CDs) expire. They earned 4.5 percent to 5 percent interest on them, and now new CDs are offering just 0.5 percent or 1.5 percent a year to renew. My advice is: wait. Stash the money from the CD in a money market account. If you hold off for about six months or more, you can renew the CD when interest rates are higher. You’re better off accepting a lower return in a money market for a little while rather than locking in a lower rate for a five-year CD.

4. Check to see if you’re saving enough money. Use this calculator to see if you’re saving enough for retirement, your children’s education, and your other goals. If you’ve planned correctly, you’ll be delighted to find that you’re on track or maybe ahead of your goals. On the other hand, if you’re falling behind, it’s time to adjust your budget (that means spend less!) and invest more.

5. Clean up your investment accounts. Some people open different accounts at various times when they see a stock or mutual fund they want to buy. If you still have a 401(k) account at a former employer, move the money to your current employer’s 401(k) plan or to an individual retirement account (IRA). This is better than taking a lump sum from the old 401(k), because then you’ll have to pay a penalty and taxes on that money. Keeping the various accounts is like those old sweaters collecting dust in your closet that should have been given away a long time ago. Consolidate your investment accounts in one place; close any accounts that you don’t need anymore. All of your investment accounts should fit into a cohesive strategy to reach your financial goals. Getting your financial house in order will make it much easier to monitor your investments and help build more wealth in the coming years.

Adam Bold is the founder of The Mutual Fund Store. which provides fee-only investment advice with locations coast-to-coast. He’s also host of The Mutual Fund Show, a call-in radio program broadcast across the country. Bold is author of the book The Bold Truth about Investing (April, 2009). Bold is Chief Investment Officer of The Mutual Fund Research Center, an SEC registered investment adviser which provides mutual fund and asset allocation recommendations and research to stores in The Mutual Fund Store system.