Along with the familiar examples of collective optimism at the end of every year — losing five pounds, quitting smoking, definitely returning library books on time from now on — the financial industry likes to offer its own New Year's resolutions.
Those resolutions range from keeping clients on track with budgeting and basic financial management, to predictions for what the Fed's future rate hikes will mean for their portfolios.
Here are 10 bon mots from industry experts and observers on what to expect and how to respond in the new year.
Josh Brown, The Reformed Broker
The prolific tweeter and planner at Ritholtz Wealth Management collected wisdom he's gathered from other experts this year.
Among the most important lessons is that as digital innovation spreads further into consumer's lives, it becomes harder to get an accurate picture of risk.
He cited Izabella Kaminska of FT Alphaville, who called digital liabilities an "underpriced risk factor when assessing the value of potential tech unicorns."
For example, popular "sharing economy companies" like Airbnb and Uber drastically underaccount for operating costs associated with everything from insurance coverage to capital depreciation and customer relations. "In other words, I learned there really is no free lunch and that every advantage that information tech innovation affords us, in time opens the door to an equal and equivalent disadvantage," she said.
Charles Rotblut, Editor, AAII Journal
"Only follow strategies you can stick with no matter how good or bad market conditions are," Rotblut said.
It's easy to think you're good at investing when the market is doing well, he wrote, and tempting to make changes when it starts to turn around. "In between is the reality that the long term lasts beyond the period of time that our emotions are willing to consider."
Adam Zuercher, Co-Founder and CEO, Hixon Zuercher Capital Management
Zuercher's resolutions point out how important it is to remember the basics: make a monthly budget, stick to your budget, save more, make the most of your retirement contributions.
He noted that just 8% of people keep the New Year's resolutions they make. To get over that hump, he suggests making resolutions that are easy and concrete.
"In our experience, people who set goals for themselves and create strategies to pursue them are much more likely to see success," he wrote. "One study found that investors who leveraged specific financial strategies saw greater long-term financial success. Sit down with your loved ones to discuss your financial goals."
Roger Wohlner, Financial Writer
Wohlner targeted mutual funds in his resolutions, specifically when to consider selling one.
One indication that it might be time to sell — or two, really — is a significant inflow or outflow of dollars. Mutual fund managers should stay fully invested within their mandate, he said. So if an investor is in a large growth fund, the manager shouldn't be investing in cash.
On the other hand, "money follows success," Wohlner wrote. Unfortunately, an infusion of too much new cash too quickly can "pose a real problem" for managers trying to find good investments within a fund's style.
"I am not an advocate of the frequent buying and selling of mutual funds or any other investment vehicle for that matter," Wohlner wrote. "However, mutual fund investing is not about sending in your money and forgetting about it. Successful mutual fund investors monitor their holdings and make changes when and if needed based upon a number of factors."
