With the Christmas season behind us, and 2019 just a few days away, we naturally have a moment to both reflect on the year gone by as well as look ahead toward the new year.
Our goal at TradeSmith is to provide the resources you need to be successful individual investors.
We include in that goal not only our powerful suite of products, but also our editorial and educational content as well. I hope you’ve found them to be informative and helpful along your investing journey.
Here are a few of my favorite editorials from 2018:
- European Equities Could Be a Great Buy in 2019
- What the Inverted Yield Curve Means (and Why You Shouldn’t Worry About It)
- 39% per trade… over 22 years!
- Overcoming Your Greatest Obstacle to Investing Success
Looking ahead to 2019, it’s natural to think about ways to improve by revisiting goals and making New Year’s resolutions. We can’t control the markets, but there is much we can do to set ourselves up for financial success.
Of course, finding worthy improvements requires reflection on your past performance first. Commit to taking an hour or two to review your biggest decisions from 2018 and consider if there was room for improvement.
Did you quit on a winner too early, or wait too long to get out of a losing investment? Did you put too much money into a stock that you were really excited about? Was your portfolio out of balance?
Once you’ve identified what you want to improve, consider some or all of the following financial resolutions as we move into 2019.
- Resolve to have an exit strategy for every investment. An easy step — and one I talk about often — is to set an exit strategy for every investment you make. You can follow a trailing stop, or even the Stock State Indicator (SSI) Alerts in your TradeStops account.
You may even find some other strategy altogether, but your exit plan should always be tailored to fit your individual investment goals. The point is that you should have an escape plan for when things go south that will help take the emotion out of any decision to sell.
- Resolve to perform regular, timely Portfolio Reviews. Review your results on a regular periodic basis. The markets change constantly; the SSI alerts for every position in TradeStops are updated daily and the Volatility Quotient (VQ) for each position is updated weekly.
A lot can happen over the course of a month, a quarter, or a year that can impact the overall volatility of your portfolio and put you at higher risk than you might be comfortable with.
By examining your portfolio on a regular basis, you can ensure you’re taking only as much risk as you’re comfortable. The Risk Rebalancer and Position Size Calculator in TradeStops can help you meet this goal. And our research has shown that rebalancing your portfolio can produce stronger overall results.
- Resolve to read a personal finance book. Education is important to informing and guiding our decisions. In addition to the strong editorial content you’re getting in your inbox, find one or two books this year that might give you a new viewpoint or a new idea to inform your approach on investing.
Two books that I highly recommend are Thinking in Bets by Annie Dukes and Market Mind Games by Denise Shull.
- Resolve to listen to a financial podcast. In a similar vein, if you don’t have time to read (or even if you do), check out a financial podcast. One I enjoy (and have participated in a few times this past year) is The Investor’s Podcast with Preston Pysh.
- Resolve to try something new. One adventurous resolution people often make is to try something new in the new year. While that isn’t always tied to investing, it certainly could be. Perhaps you want to explore the world of cryptocurrencies with an eye toward dipping your toe in the crypto waters. (I personally believe it’s an excellent time to consider getting involved in crypto.)
I want to thank you for your support in 2018 and send you best wishes from myself and the rest of the TradeSmith team for a successful 2019.
Here’s to a great new year!
Richard Smith, Ph.D.
CEO and Founder of TradeSmith