1) I will try to consume less financial news media. A steady diet of CNBC, BNN, WSJ, FT, FP, G&M and lots of unhealthy blogs has left me bloated and sluggish. I will try to remember that the scary daily headlines and ramblings of those who don’t know any more than me are just noise that distracts my focus. I will continue to exercise my judgment and base my decisions on fundamental data, not speculation.
2) I will not mimic any index or benchmark. The S&P/TSX index continues to be a poor measuring stick. With close to 80% of the index allocated to three sectors, energy, materials and financials, the index is fraught with high risk. I will diversify my client’s assets and limit their exposure to any one sector or any one company.
3) I will remember that companies that pay dividends will be the cornerstone of my client’s portfolios. I will not forget that companies that have a history of raising dividends offer me the best source of insider information. A company that raises its dividend, signals to investors its confidence for the coming year.
4) I will resist the urge to market time. I will not forget that most of the year’s profits only come from a few trading days and since I don’t know when the next big up days is, I will have to sit tight. My decision to buy or sell a stock will not be based on whether the market is going down or up. My decision will be based on valuation.
5) I will not forget that I am a long-term value investor. Sometimes value and price can get disconnected and stay that way for an extended period of time. I will continue to remember that my best investment decisions are made when values are the cheapest.
6) Finally, I will resist the temptation of group-think. I will continue to challenge my assumptions daily and surround myself with colleagues and clients who can do the same.
