This time of year, it’s customary to promise that next year I’ll be a better version 2.0 of myself. Often, however, these promises are verbal and quickly forgotten. I decided to write down my own investment-related promises here for everyone to see publicly, and possibly during/at the end of next year, I’ll revisit these promises and see how well I kept them.
Vara-Paavi 2.0:
I will switch to monthly investment tracking from the current weekly tracking. I don’t really benefit much from weekly tracking; instead, it currently feels like a small burden to do it every weekend. Instead, I will create a monthly report in a bit more depth, and also review my investments as a whole by asset class (equity/fixed income/alternative/real assets), and verbally write down my thoughts and views monthly so I can later assess how well I was actually aware of the situation. If I dare, I might even start a Blog here (thanks @Sijoittaja-alokas for bringing this Forum functionality to my attention with your Advent calendar!)
I will nail down my investment strategy in written form and finally read the forum’s “Investment Strategy” thread. The investment strategy will include rules, guidelines, and thoughts related to selecting investment targets, trading, and risk management.
I will also dare to sell investments if their weight in the portfolio grows larger due to good performance than risk management allows.
I will keep the use of leverage at a more moderate level. In practice, this means limiting Nordnet’s Superluotto (Super Credit) to a maximum of the gold level (interest rate 0.99% p.a.), but most likely I will try to eliminate leverage completely to zero and perhaps even build a small war chest at these valuation levels
What are your own promises for 2022 as an investor, related to strategy, risk management, activity, or any other aspect of investing?
I promise to be the eQ of my own life and strive for simplicity, with an iron focus to follow my strategy without rambling, and to stop all this speculating and tinkering. This year, too.
Maybe try sticking to your investment plan for a change. Small, regular sums into indexes, and at least at the beginning of the year, use the rest of your salary surplus to grow and maintain your war chest. You can still buy stocks, but you must have cash on hand in case of a crash. And you could reduce the amount of time you spend staring at stock prices, as daily fluctuations don’t matter much when you’re making long-term investments.
I plan to stick strictly to my own investment plan. I am currently happy with my own investment portfolios and will let time do the work. I will not chase after any hype/fashion stocks. I did too much of this in 2021, and unfortunately, it shows in the return curve. I got burned many times, and trading costs made an unpleasant dent in my returns.
I didn’t succeed with this in 2020, but this year I’ve managed to keep it in mind enough, so let’s continue with the same approach next year:
Let profits run and cut losses quickly.
It also brings to mind companies in my portfolio starting with the letter L (I don’t believe in horoscopes, but these have certainly generated losses).
I promise to be a little bolder and also take those “small wins,” meaning using part of the cash to capitalize on price fluctuations. However, I’ll do so in a way that doesn’t turn into gambling.
I’m going to simplify my own operations. Continuous saving in index funds will continue, and I want to increase their share in my portfolio. Additionally, I’ll save cash for good buying opportunities. Fewer speculative stock purchases and less trading—I plan to add to existing holdings if good buying opportunities arise. New companies will be added to the portfolio with greater consideration, and they must be ones I genuinely want to own and follow. Otherwise, it’s just as well to put that money into indexes.
During the year, 1-3 purchases depending on my financial situation, either topping up old holdings or carefully considering bringing a new one into the portfolio. Sales only if I see the company’s growth/dividend story taking irreversible steps backward.
The goal for the year is to HODL, unless something dramatic happens.
I’m trying to make fewer than two trades in euros. (One might be needed for tax optimization in December, and I’ll probably reinvest US dividends).
In the background, there’s a big tax bill coming this summer, which means I don’t have extra new money, and I’ll probably have to pay most of the bill with a loan.
I will stick to my investment plan even if the sky falls, the entire global economy collapses, and only sentimental value is left in my portfolio.
I will stick to my investment plan even if the portfolio value skyrockets, the global economy shifts into high gear, and money flies in through every door and window.
Absolutely brilliant, a true internalization of Uncle Masse’s (Masse-sedän) excellent investment guide, YES! Right at the beginning of the guide, chapter 1, verse 2 states: “Buy low, sell high”
Uncle Masse (Masse-setä), FA, By doing this, you can’t help but Win!!
I’m doing my first “comprehensive report.” The idea is to articulate a potential investment for the first time before reading an analyst’s report on it. I already have one company in mind. Of course, I won’t put the information here yet, as I reserve the right to change the target. I will share a link here once I’ve finished writing something. It will probably be a mess, but at the same time, it would help me better internalize the calculation formulas, qualitative factors in the analysis, and understanding the competitive environment. I know the operating principles for those, but I’ve never actually calculated through or properly written down my thoughts on an investment target.
(thanks @Sijoittaja-alokas for bringing this Forum functionality to my attention with your Advent calendar!)
