New Year's Investment Resolutions

It's that time of year when many of us think about establishing one or more New Year's resolutions. Everybody wants to be healthier, and many people want to be wealthier, but it's just not that easy. Most of us are creatures of habit and discover that making permanent changes in our behavior is surprisingly difficult.

Perhaps a set of New Year's Investment Resolutions, along with an advisor capable of helping investors adhere to them, will lead to a more prosperous future. Below are ten investment-related resolutions that will hopefully result in better long-term wealth:

1.	I will not confuse entertainment with advice. I will acknowledge that the financial media is in the entertainment business and their message can compromise my long-term focus and discipline, leading me to make poor investment decisions. If necessary I will turn off CNBC and turn on ESPN.
2.	I will stop searching for tomorrow's star money manager, as there are no gurus. Capitalism will be my guru because with capitalism there is a positive expected return on capital, and it is there for the taking. And for me to succeed, someone else doesn't have to fail.
3.	I will not invest based on a forecast—whether it is mine or anyone else's. I will recognize that the urge to form an opinion will never go away, but I won't act on it because no one can repeatedly predict the future. It is, by definition, uncertain.
4.	I will keep a long-term perspective and appropriately consider my investment horizon (i.e., how long my portfolio is to be invested) when determining my performance horizon (i.e., the time frame I use to evaluate results).
5.	I will continue to invest new capital and work my plan because it is time in the market—and not timing the market—that matters.
6.	I will adhere to my plan and continue to rebalance (i.e., systematically buying more of what hasn't done well recently) rather than "unbalance" (i.e., buying more of what's hot).
7.	I will not focus my portfolio in a few securities, or even a few asset classes, as diversification remains the closest thing to a free lunch.
8.	I will ensure my portfolio is appropriate for my goals and objectives while only taking risks worth taking.
9.	I will manage my emotions by learning about and acknowledging the biases and cognitive errors that influence my behavior.
10.	I will keep my cost of investing reasonable.

Just as successful athletes rely on coaches and trainers to help them achieve their goals, most investors can probably benefit from having a "financial coach" to remind them about their New Year's resolutions and keep them on track toward a more prosperous future.

We wish you and your family good health and good wealth in 2015.


BMM .....Because Money Matters



Investment advisory services are offered through Berson Money Management, a registered investment adviser offering advisory services in the State of California and in other jurisdictions where exempted.  This article was provided by courtesy of Dimensional Fund Advisor LP, an investment advisor registered with the SEC. This communication is not to be directly or indirectly interpreted as a solicitation of investment advisory services to residents of another jurisdiction unless otherwise permitted.   The contents of this email and any accompanying documents are confidential and for the sole use of the entity to whom they are addressed.   They are not to be copied, quoted, excerpted or distributed without express written permission of the firm.  Any other use beyond its author's intent, distribution or copying of the contents of this e‐mail is strictly prohibited.  Nothing in this document is intended as legal, accounting, or tax advice, and is for informational purposes only.