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You can’t avoid it; it’s coming, and there’s nothing you can do about it. No, not the fiscal cliff; rather, the annual ritual of making New Year’s resolutions! Our good intentions to make changes that will improve health, relationships, eating habits, etc. often flounder. 80% of all such resolutions, on average, fail by January 20!

For those resolving to improve their financial standing in the coming year, we offer the following simple “resolution checklist” for your consideration:

Resolution #1: Make sure your investments (including your overall stock/bond exposure) align with your financial plan. If you don’t have a financial plan, make that resolution #1.

Resolution #2: Understand what you own in your investment accounts. Don’t simply assume your advisor is “taking care of things” for you.

Resolution #3: Diversify your investments. This doesn’t mean holding a handful of different stock in your portfolio. It means having exposure to multiple asset classes around the world that behave differently from one another.

Resolution #4: Keep costs down. It’s one of the very few things in investing that you can really control. Not sure what, if anything, your investments cost you? Don’t think for one second any of them are free; look at commissions, transaction fees, and expense ratios. Those tend to be common expenses borne by all investors, and often not well-disclosed.

Resolution #5: Tune out the noise. “Advice” from television talking heads is not specific to your situation and may have little or no relevance. Screaming newspaper headlines striking fear or advertisements promoting once-in-a-lifetime opportunities are also generally not helpful. Emotions always have a way of clouding our decision-making ability.

Resolution #6: Stay the course and resist the urge to “tweak” your current allocation in response to (or in anticipation of) market, economic or political events. Markets factor all this information into prices very rapidly, so there’s a good chance the risk is already priced in by the time you take action. Remember, you’re not the only one out there who’s thinking about these things. Of course, if your own financial circumstances change, it may be valid to consider changing your allocation in response.

Resolution #7: Rebalance your portfolio periodically. This keeps you somewhat close to your intended risk target on a consistent basis. Be conscious of not making insignificant rebalancing changes.  Make changes only when you’re meaningfully out of balance so transaction costs don’t eat up return.

Following these suggestions will help hold you accountable to yourself. It will also make your likelihood of investment success greater than your likelihood of keeping off those ten pesky pounds you want to lose this winter season!

As we enter another year that promises uncertainty, complexity, challenges, and changes, we extend our best wishes for a happy new year to you and your family.