| Here are 5 actionable New Resolutions you can adopt anytime (but sooner the better!)
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Listen to the audio version of this article here (it’s an Ai-generated interview format which is surprisingly engaging!)
1. Don’t confuse Trading with Investing
Don’t look for the next hot stock that happens to be doing well right now. You’ll find these trades go down as quicky as they go up. This approach needs more monitoring, screen-watching and stress.
More importantly, the results are poor. Check the wealth warning required to be displayed by the trading platforms at the top of their home-page.
Typically, those who teach trading have no professional background in investing. For something so important (your financial security) you need a more solid approach.
2. DIVERSIFICATION is investing (and it’s simpler)
In mistaking trading for investing, some people may build their portfolio with individual hot stocks that seemed a good idea at the time. The result being a mish-mash of stocks assembled without any real process.
During a sell-off, the stocks go down together because the portfolio wasn’t as diversified as expected. A common example is when people bought shares in post-covid themes around 2020-21. I still see people sitting on such stocks, many of which have steep losses.
A properly diversified portfolio mitigates risks from specific stocks, themes and countries.
The best thing is that modern Global ETFs and Funds do all the hard work for you – they get automatically diversified and rebalanced. Making them truly set-and-forget with minimal monitoring required.
3. Remember your Free Money
When investing, people often agonise about searching for the best-performing investments. Which isn’t always easy.
But building wealth is often as much about doing easier things – such as letting the taxman add lumps of capital into your pension pot every year. That’s literally free money.
Making pension contributions does exactly that. Depending on your circumstances, HMRC can top-up your pension pot by £tens of thousands per annum.
This tax year ends on 5th April so you should consider taking action now.
4. Stop Paying Fees for Poor Performance
Millions continue to pay high fees for poor performance. If you have pension schemes or IFA-managed funds, check your returns.
Did they return 25%+ in 2024 and 80%+ over 5 years?
If not, your provider may be underperforming – and still extracting high fees from your portfolio.
Don’t keep paying excessive fees for poor returns! Remember to ensure your retirement funds are working for you, and not someone else.
5. Don’t listen to pundits and forecasters
It always sounds intelligent to have a conspiracy theory about the economy or to declare stocks being over-valued. These chancers are more often wrong than right!
Of course stocks decline occasionally but here’s why the market never truly crashes
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Investment Foundations …
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