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Also check whether you made money.
Did you beat your benchmark?
This process is usually easier for an investor, as investing moves slower.
But, as always, you must ask whether you are really making money in most years.
If not, you should stop and just buy exchange-traded funds.
You also need to check in on how you can get better – and you can always get better.
For me, the big one here is to read more.
I always target 52 books a year; half of them non-fiction.
I always miss this target.
So this year I started using Blinkist.
This online service provider supplies readers with a short summary of books.
This gives me a much better idea if a certain book is something I would enjoy reading and learn from, which has enabled me to hit my reading target for the first time in years.
Investors also need to check if they’re being swayed by short-term events.
The local market has been experiencing rough times for about five years and there are lots of fears about our local economy.
This has led to many kneejerk reactions by investors, including some people even cashing in their pensions to move their money offshore.
No kneejerk reaction is ever a good idea.
Rather spend the time you would have done reacting on reflection; look at what’s happening locally and ask yourself if the worst is behind us or still coming.
Traders need to review their returns and the amount of time spent trading.
Many newbies tend to go all in.
However, as you go, you slowly get smarter and start pulling back – trading less and learning to focus on the process – and trusting that a disciplined process will be followed by profits.
Traders also need to check entries and exits and ensure they are absolutely disciplined about these.
If you’re missing stop-losses, check to see if you can automate them, effectively removing yourself from the process and making it reliable.
The risk with trading is that one bad trade can lead to negating an entire year’s trading.
So, you need to be totally disciplined in every trade.
How do we ensure that we are?
Spend some time over the holiday to come up with ways as to how you could be a better trader and investor.
Then break these ideas down into smaller parts which you can manage into a process. Then start implementing this process.
As you go along, you may well discover some flaws in your process – in which case you can then adjust it accordingly.
The important thing, however, is to ensure that every year you’re getting better at investing and trading – one small step at a time.
This article originally appeared in the 12 December edition of finweek. Buy and download the magazine here or subscribe to our newsletter here.
