5 New Year’s Resolutions Investors Should Make for 2024

Here we are, at the start of a bright, shiny new year! What will 2024 bring?

We’re all great at making resolutions. Come January 1, we plan to drop 50 pounds… train for a marathon… write the Great American Novel…

But when it comes to sticking to those resolutions… well… that’s another story.

We may be failing when it comes to New Year’s resolutions because we often skip an important step: We don’t take a moment to assess where we are right now.

This may seem like the kind of “psycho-babble” that so-called gurus tout on their social media accounts.

However, reflecting on what put you in your current situation is critical.

If you don’t understand the habits and behaviors that put you in your current situation, then there’s a good chance you’ll find yourself right back in the same boat.

Stop Making the Same Mistakes

Consider what Marshall Goldsmith wrote in his book What Got You Here Won’t Get You There: When it comes to improvement (whether it’s our health or investing or leadership), instead of creating a “To-Do” list when looking to improve, try going with a “To-Stop” list.

To become a better investor, sometimes all it takes is for us to stop making the same mistakes we’ve made in the past.

That could be as simple as not taking a flyer on a “hot stock” we heard about during a holiday party. Or not watching small losses tumble into large ones before selling. Either way, putting items like this on your To-Stop list can dramatically improve your results.

Whether or not you’ve decided to make New Year’s resolutions, we’re willing to bet that most of you have a goal of becoming a better investor.

So toward that end, here are five tips that will help keep you in the green in 2024 and beyond.

5 Investing Resolutions for 2024

1. Ignore the Daily Market Chatter
This first tip is one that we here at Street Authority constantly remind ourselves to keep in mind. After all, there’s hardly a day that goes by when we’re not plugged into the market. We’re always either reading or researching something regarding the market or the economy. It’s part of our job.

While it’s good to stay abreast of the market, being engulfed in the daily market hysteria causes nearsightedness — meaning you lose sight of the bigger picture. You forget about your long-term goals, and pretty soon you find yourself trading stocks on a daily whim.

When investing for long-term success, you must think about what will make money now as well as 15 years from now. We want to buy great companies at a great price and hold on to them for the long haul.

2. Understand What You’re Investing In
When it comes to each stock in your portfolio, you should at least be able to pass the elevator test. This means, could you give someone an overview of what the company does, its important key metrics, as well as its growth prospects in the space of an elevator ride?

Beyond that, how does the stock fit into your portfolio? Does it give you more exposure to the healthcare industry or the technology sector? Is the stock meeting your expectations? Is it performing well relative to its risks and the overall market?

And perhaps the most important question of all: Why did you buy the stock in the first place and is that thesis still valid today?

These are some good questions to ask as you look through your portfolio or before you buy your next stock. Having a firm understanding of your investments will help with the first resolution as well. You’ll be less likely to be swayed out of a stock or into a stock from the daily market hysteria.

3. Realize Your Best Investment Might Already Be in Your Portfolio
Investors tend to think that they must constantly be looking to add a new stock to their portfolios. But the truth is that if you have extra money that you would like to invest, your first stop should be your current portfolio.

It takes a lot of time to form a solid understanding of a business. And if you’ve followed resolution #2, you should already have a solid understanding of your holdings. You should know if one of your stocks is currently undervalued by the market. If it is, then it could be a good time to invest your extra cash into something you already know and own.

So before you take a flyer on the day’s “hot stock,” look first at your portfolio. Your best bet could be right under your nose.

4. Don’t Be Afraid to Sell
This is one of the hardest things for an investor to do. Whether selling to capture a gain or cutting a loser short, this phenomenon provides an interesting insight into investor psychology.

Selling at a loss is like admitting you’ve made a mistake. And no one likes to be wrong. On the flip side, booking a profit takes its own toll on your psychology. It’s easy to wonder if you’ll miss out on future gains.

This causes investors to hold on to a stock for all the wrong reasons. Don’t think about what might happen after you sell a stock. If it makes sense to sell, then do it.

5. Set Small Milestones to Reach Your Ultimate Goal
Whether your goal is to retire by a certain age, make a certain return each year, or even lose weight, this is absolutely key. Setting realistic weekly/monthly/quarterly goals will help you stay on track to hitting your bigger goal.

By forming shorter-term goals, not only will your larger goal feel more achievable, but the constant reminder will help you stay on track. Don’t forget to write your goals down. According to a study by Gail Matthews at Dominican University, those who wrote down their goals accomplished significantly more than those who didn’t.

Bringing It All Together

We hope these investing tips are useful as you form your investing roadmap for 2024.

And if you need more guidance for the New Year, we have another tip for you…

For market-thumping gains with mitigated risk in the new year, we suggest you consider the advice of our colleague Jim Pearce, chief investment strategist of Personal Finance.

Founded in 1974, Personal Finance has helped investors build wealth for nearly 50 years.

Case in point: If you had taken the initial recommendation of Personal Finance to buy Chevron and held on, you’d be sitting on a whopping return of nearly 3,200% (that’s not a typo).

Want to get aboard “The Next Chevron”? Click here for details.