Despite concern over rising bond yields, many investors see today as the best of times.

The economy is growing and should get stronger as stimulus checks and child-care tax credits help millions of American families. More people are getting vaccinated daily, raising the prospect of a more open economy.  And, at least for now, inflation and interest rates remain low.

Given this scenario, how should investors play the rest of the year?

I believe that investors cannot actually time the market, no matter the economy’s strength or the valuation of the stock market. Instead, through thick and thin, you stick to the same, solid diversified financial plan initially created to build financial independence.

Unfortunately, many investors are making some dangerous moves.

Some, within a couple of years of retirement, are trading more individual stocks in their accounts, chasing returns as they approach the finish line. This is one of the most dangerous things an investor can do. With every pullback, they see a buying opportunity. And nearly all of them are buying the most popular technology related stocks, which have soared in value over the past year.

A smart investor understands that there are money moves to make, and traps to avoid.  Here are some to consider taking now.

Review your portfolio allocation: It’s always wise to review your asset allocation to make certain it’s in line with your risk tolerance, particularly for baby boomers close to retirement.

The recent bull market has led to the perception that risks are low right now, but typically when investors are most comfortable, risks are actually elevated. Making sure you are truly diversified in multiple asset classes — including value and international stocks, which have done poorly over the past couple of years — is extremely important right now.

Many investors have become less and less diversified at this point and are overly exposed to the stocks and sectors that have been the best performers of late.

Review your savings priorities: The pandemic taught us that the best way to be prepared for the unexpected is to have a hefty financial cushion. Before plopping down $25,000 to buy more Facebook or Apple stock, make sure key investment accounts are fully funded.

These include health savings accounts, which allow individuals to contribute $3,600 and families to contribute $7,200 in 2021; 401(k) plan and other qualified retirement plans, traditional and Roth individual retirement accounts; and, finally, after-tax savings accounts.

And while you may have quite a nest egg built, keep enough cash in the bank to fund three months to six months of living expenses. At some point, there will be a recession or a market downturn. Instead of tapping into assets that have lost value, you can pay for any needs with an emergency fund.

Rates are still low, so consider refinancing: Even if you missed out on last year’s historic low rates, interest rates are still at generational lows. For people with a mortgage, personal or credit card debt, investigating your options now would be prudent.

The one caveat here is federal student loan debt. Payment requirements have been paused and interest payments have been suspended. And there is the possibility that some amount of these loans could be forgiven.

Until there is more clarity about future payments, consider holding off on refinancing any federal student loans you may have outstanding. However, if you have privately held student loans and can get a lower interest rate, refinancing makes sense.

Estate planning is important: Many young individuals and couples neglect setting up a will and estate plan in their early years. But after the scare we experienced from the pandemic, all of us should make certain our loved ones have financial security and that assets are distributed based on your desires if the unexpected happens.

The review checklist includes updating life insurance policies and health-care directives, as well as beneficiaries for all insurance, brokerage and retirement accounts. With online platforms now more robust than ever, cost-effective solutions are available at the click of a button.

Let’s be honest, none of these recommendations are exciting. And that’s just the point. While others may be chasing the latest hot stock, now is the time to make certain your financial foundation is intact.

— By Jeff Harrell, director of portfolio management at Brightworth