Five Resolutions For The Second Half Of 2017

I gave up making New Year resolutions a long time ago. But it doesn’t mean I lack resolve….

…I now make resolutions all year round. I find that I have a greater chance of succeeding, when the added pressures of the New Year are lifted.

If truth be told, the New Year is a terrible time to try doing something important. It is much better to set out our stall, when we are more relaxed, such as now.

Less is more

Just as we should not make too many resolutions, we should try to limit our investing styles. We stand a greater chance of success, if we channel our efforts into just one or two types of investing.

For some, it could be income investing. Others might prefer growth or value investing. Whatever style you choose, try to be as expert as you can.

If it is income investing, then focus on shares that can deliver sustainable and growing income for your portfolio. Don’t ever get distracted by what others may do.

Be different

Never follow the crowd. How often do we find that people choose the same resolutions as their friends? If someone thinks that signing up for a gym membership is a good idea, then others tend to follow.

Investing can be a bit like that also. Too many people buy what others are buying. But it is better to think about what you want to achieve from your investments.

Work out where your finances are now, and decide where you want to be in 10 or 20 years’ time. Calculate how much you would need to invest regularly to achieve those goals.

A Problem Shared

Share your goals with your friends. That goes for resolutions as well as investing. Consider joining an investment club, where you can chat with fellow investors who share similar passions.

Warren Buffett once said: “I learned that it pays to hang around with people better than you are, because you will float upwards a little bit.” It’s quite uncanny how that seems to work.

Make a checklist

To stay motivated, monitor how you are doing. If one of your resolutions is to walk a little farther every day, then buy a pedometer to see how you are performing.

When you invest, try to follow the companies in your portfolio to see how they are doing too. Watching the share price won’t tell you much. But watching the financial performance of the company could.

In the short term, there’s no correlation between the performance of the company and its share price. But in the long term there is. So monitor its progress. If the opportunity presents itself to buy more shares at a good price, then don’t hesitate.

Reward yourself

Give yourself a reward whenever you achieve a goal or an important milestone. That applies to both resolutions and investing. Incentives can be empowering. They can give you a real sense of progress.

If your portfolio has outperformed your objectives, then treat yourself from a bit of the proceeds. You might want to use some of dividends to buy yourself a small present.

We invest for a purpose. But it’s not always about giving up all of the best things in life. Instead it is to enjoy the proceeds. But never be discouraged if things don’t go swimmingly. Treat any failure as a temporary setback, rather than a reason to give up altogether.

We are never going to be right every time. So, enjoy your successes. But enjoy learning from your failures too.

Enjoy the rest of 2017!

A version of this article first appeared in The Straits Times.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.