You don't need me to tell you that January is the season of resolutions, goals and general self-improvement - as well as re-gifting unwanted boxes of Turkish Delight at the first dinner party you go to. (Sorry mum. Though not as sorry as I am that they won't also take those 'amusing' socks you gave me in lieu of a bottle of wine.)
Perhaps you have already slipped off the booze wagon, succumbed to just one cigarette, missed a Zumba class, or sworn in front of your littlest when the "b***dy car wouldn't start AGAIN!"
Now I can't comment on whether you should be shedding a few pounds in 2017 - or whether you have already given up too easily.
But I can offer a few tips on handling the other kind of pounds.
In particular, when it comes to growing your wealth through shares, I'd highlight a key difference between the two types of goals I see investors set themselves.
On the surface, both seem laudable - or at least harmless.
But in practice one kind can hurt your chances of getting where you want to be.
The market did it
I'm distinguishing here between goals where you have some control over the outcome versus those where it's really out of your hands.
An example. Let's suppose you resolve to increase your savings into your share ISA from £500 to £1,000 a month.
Assuming you've done your budgeting and the rise looks feasible, that's a goal you commit to.
A great goal, I might add. Very few of us are saving enough money.
But what if in contrast you set the goal of achieving at least a 10% return on your portfolio in 2017? Or of doubling your portfolio's value in five years? Or of having £250,000 invested in shares by the time you're 40?
They sound similarly laudable. But to my mind, they're not so helpful.
You see achieving these things is partly out of your control. Worse, monitoring your progress against them plays into the hands of one of your biggest enemies as a saver and investor, which is the volatility of the stock market.
Say we saw another downturn like we went through in 2008 and 2009. You could be the best investor in the world but your portfolio would still crater.
Bang goes hitting your target.
Even in an average year, much of your return will be down to market conditions. Professional investors call that portion of your return the 'beta'. It's the result you'd have got if you'd just bought an index tracker fund.
You're kidding yourself if you don't admit beta makes up much of your gains (or losses) each year.
Any value you add through stock picking is called 'alpha'. If you use active funds and they beat the market after fees then that edge is alpha, too.
The whole premise of active investing - whether you do it yourself or pay somebody to do it - is that it might add some alpha. Over time, consistently adding alpha will make a huge difference to your final result.
But in any given year, it's beta that will mostly determine your returns.
And beta - by definition - is outside of your control.
The problem is not just that having a market-driven goal that is out of your control goals is useless, especially in the short-term.
It can be dangerous.
Let's say you aim to achieve a 10% return a year. But it's June and your portfolio is down 2%. You're 12% behind target.
The risk is you'll start to trade away your carefully chosen shares or funds to try to get back to 10%. The quality of your portfolio deteriorates, and there's a good chance you'll buy weak shares or funds that go on to do worse or hot ones too late, either way compounding your poor performance.
Another risk is missing your target could be completely dispiriting, turning you off investing altogether.
Returning to the last big crash, people saving for their retirement in 2007 weren't doing anything wrong by owning shares. Investing was a sensible course given their long-term time horizon.
The market still halved anyway, and left many wondering why they'd bothered with equities. Some still are, almost a decade later.
Resolutions worth making
Am I saying you should have no aims or targets?
No. I'm not against a long-term plan, say, that spits out a retirement income figure and tells you what sort of pot might be required to achieve it.
True, you're still at the mercy of the market, this time also in terms of what income you'll get from a lump sum of capital in 20-30 years time. (Recall the collapse in annuity rates in recent years).
But at least a long-term plan gives lots of scope for course corrections and riding through market turbulence.
In the short-term, though, I think New Year investing resolutions are best focused on things you can control.
We all have plenty of bad behaviour we can try to curb in our investing, and good habits we'd do well to pick up.
You might resolve to:
- Research a new company every week
- Reappraise your worst performing share each month
- Trade less frequently
- Run your winners longer
- Read an investing book every fortnight
- Stop visiting scaremongering websites
- Increase your pension contributions
- Fill your ISA
- Review your portfolio's performance biannually
These are things you can do regardless of whether we're in a bull market, a bear market, or a mouse of a market.
Watch your step
Big aims in life can be motivating but, as the Chinese proverb says, a journey of a thousand miles begins with a single step.
Concentrate on the steps, and the destination will come to you.
Avoid these pitfalls
To help you streamline your investment process, realise and understand the most common investor mis-steps, the Motley Fool has put together this new free report entitled The Worst Mistakes Investors Make.