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Pop the champagne! Let off the fireworks!
At midnight, an old year finished and a new one began.
Sing it with me… "Should old acquaintence be forgot…"
Huh? Not as excited as me?
Didn't even realise that Financial Year 2020/21 has just given way to Financial Year 2021/22?
Fair enough.
I can't say I blame you.
Truth be told, I'm not that excited, either.
One arbitrary trip around the sun shouldn't really be the basis for either decision-making or for determining success or failure.
Long term investing (which should be a tautology, given all investing should be long term!) isn't measured in days, weeks, months, or even a year.
So, while you'll read plenty of 'the year that was' articles today, they're just not that important.
They are the equivalent of what political journos call 'racecalling' — focussing on the short term 'winners and losers', rather than the deeper, more important issues that actually matter.
Warren Buffett has had some terrible years. And some great ones.
But neither matters all that much — it's the compound impact of all of them, combined, that determines success or failure.
He focuses on the process and lets the results take care of themselves.
And — spoiler alert — that's the secret to investing success.
Not the 'biggest winners of last year'. Not even the 'biggest winners of next year'.
Not the trendy 'FOMO' stocks. (Or cryptos, or anything else).
Not the 'hot new things'.
Disappointed? That's okay.
See, here's the thing: you can be the tortoise, or you can be the hare. We know how that turns out.
There are no shortcuts, I promise you.
Just sensible, long term investing.
Sure, you can wish it was different. You can pretend it's different.
You can spend your time (and perhaps your money) trying to find some hot new thing, Some shortcut. Some 'get rich quick' scheme.
Good luck.
I hope most of you reading this are already members of the 'get rich slowly' club, instead.
The one that I think has much, much better odds of success.
The one that knows great investing results have always come from disciplined saving, regular investing in quality businesses, and… time.
See, despite some tough love earlier, this isn't a doom and gloom message.
It is, instead, to let you know that I think there's a better way.
That 'better way' is encapsulated in the list that follows.
See, I do this job because I want to help you achieve financial independence.
And that led to a list, first published many years ago, called "Foolish New Year's Resolutions".
I try to write something new in this space every time, but I make an exception for that list, which I repeat every six months,
It is, I hope, something of a wake-up call for some, and a touchstone to return to, for others.
So, without further ado, my list of resolutions that, I hope, can put or keep you on the path to financial independence:
13 Foolish New Year's Resolutions
1. I will live below my means — spending less than I earn.
2. I will save money into a rainy-day fund so I'm ready for what life might bring.
3. I will pay off my credit card debt, and then only spend what I can pay off within the interest free period each month.
4. I will regularly add to my investment account.
5. I will invest money I don't need for at least 3-5 years to build my nest egg.
6. I will learn more about investing, taking control of my financial future.
7. I will invest in quality businesses, buying a slice of the company, not just a code on a screen.
8. I will buy shares in a company with the intention of holding them for the long term.
9. I will sell when my investment thesis fails, the company is overvalued or I have a better idea.
10. I will avoid anchoring my decisions to the price I paid for my shares.
11. I will remember that the market can be moody and over-react, both on the upside and the downside.
12. I will expect volatility, and I won't let it spook me into selling. Indeed, volatility can offer me great opportunities!
13. I will let the market offer me prices (be my servant), not dictate my mood or actions (be my master).
(Want a printable version? I'm glad you asked. Here it is!)
Happy New (Financial) Year, fellow Fools!
Fool on!
