Since it is the New Year, and I have analyzed my portfolio from a variety of angles, it is time to set some direction and objectives for the new investing year.
I already have the broad goals for my portfolio and a strategy already in place. But are there any new resolutions I can implement to continue building a strong, diversified portfolio so that when the winds of market change blow in, I will be confident to stay the course? How can I better follow my plan?
1. Trade Half As Much.
This past year I transitioned from swing trader to long term dividend-growth investor, with a side of value and growth. I moved from holding a dozen companies to having the skeleton of a diversified portfolio with thirty. In the end, some of those early purchases were less quality, and were sold and replaced. This year I expect to make about twenty-five purchases and only a handful of sells, approximately half of what I did this past year. In this first full DGI year, I gave myself latitude, but this year I will not be lining my broker's pockets with my carefully saved funds.
2. Do Not Try to Time the Market.
In the past I spent time, energy. and trading fees gaming my portfolio, selling at tops to buy back on dips. I gained a little ground most of the time, but this year I have learned that though it seems an intelligent strategy, it is wasteful of that time, energy and trading fees.
3. Careful Due Diligence.
Instead, I will put my energy into more thorough and careful due diligence and confidently acquire, over several purchases, partnerships with quality companies that will help me meet my long term goals.
4. Consider Allocation and Portfolio Fit.
Once the companies have been scrutinized for quality, I want to be sure they fit nicely with what is already long-term core holdings within the portfolio. I plan to continue to be further diversified by sector, nationalities, risk, sectors and dividends. I need to be more careful to not overload any one sector, just because it seems like a good value or profitable trade, as I did with financials this year.
5. Don't Invest Based on the Past.
Past performance does not guarantee future returns. It is important not to invest looking backwards, but instead look ahead to your goals and needs.
6. Weed out the Companies in Which I am Not Confident.
There is still work to do on the portfolio. It is important to identify quality companies, do the due diligence to ensure confidence in a lasting partnership, considering allocation and portfolio fit, but it is time to contemplate weeding out some of the temporary companies that are still hanging on.
7. Monitor Tax Impact.
As I am increasingly more aware of the tax implications of investing actions, especially in regards to asset location, I want to ensure I am making the best strategic use of specialized tax benefits of certain types of accounts.
8. Read More Books.
This past year I read only a handful of books on investing, in addition to spend endless profitable hours reading here on Seeking Alpha. The books helped me to take a larger view of investing, building a portfolio, not just buying stocks. I need to keep that expansive perspective as I continue to develop my investing proficiency. Additionally, I learned more about specific concepts, while Seeking Alpha focuses more specifically on stocks. I will not be cutting down my SA time, but my intention is to read more books this year.
What are your New Year's Resolutions regarding your portfolio?
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.