Normally resolutions are made at the beginning of the year or on a birthday…however here are some resolutions that an investor can take / do any time:

1. I promise to reduce mutual fund costs: If you are in a diversified mutual fund which charges 2.5% (max) shift to some scheme which charges less (say 1.89% like Top 200) – it is worthwhile saving costs. You are actually shifting to a fund with a higher corpus which more people seem to be trusting. It is worth the shift!

2. Sell shares on which you are losing money: Do sell losers and hold on to winners. That is what successful investors do!

3. Sell shares of companies which treat shareholders badly: need i say anything more?

4. Know the REAL cost of holding your shares. If you bought Deccan Gold in 2006 for Rs. 30, your cost now is not 30. In normal market returns it should have almost doubled. So if you see today’s price of Rs. 24, your loss is Rs. 60 MINUS 24 = Rs. 36. Stop fooling yourself. Each person / share has to work this out depending on his cost of capital or expected returns.

5. Check the amount of life and general insurance that you need vs. the insurance cover you have.

6. Check your asset allocation 2-3 times a year and act once in a year and rebalance it.

7. If you suspect a bubble, STAY AWAY. If you think ‘Silverbullet’ is a lousy share – but see the price going up from Rs. 30 to Rs. 300, it looks a good share to short! (which means sell even what you do not have). Though this strategy is sensible the share may go to Rs. 1200 and then come down with a thus wipe you out! If you see the price movement of gold from the year 2002 to 2010, it looks great. If you look at the prices from 1975 to 2000, the current 3-4 years looks like a bubble.

8. If you do not know how to select an adviser, LEARN. This is the first step to financial nirvana. The jungle out there is too scary, and many guides are wolves – luckily in wolves clothing!

9. Talk about money, investment, risk and insurance with all stake holders in your life. These include grandchildren, children, parents, employees,…..et al

10. Clean your portfolio and create a ‘hand over document’ which should contain everything that your dependents should know about – just in case you are not there.

11. Ignore ads by the financial services industry. A friend who works for compliance in a big, big Investment banking firms says ‘You are investing at your own risk levels, overconfidence levels,…..’ and it could be injurious to health. Many of our clients would have benefited with this advice.

12. Check on the SEBI site how many brokers have clearly broken the law and quietly paid a fine ranging from a few thousands to Rs. 40 lakhs.  If your broker is on that list, RUN!!

13. Be ready for creating an ‘End of the world portfolio’. All governments, many companies and all Americans are living beyond their means. This could lead to runaway inflation – start preparing!!

more will follow….