Are you ready to make 2025 a financially healthy year?
The beginning of a new year is the perfect time to set intentions and make positive changes to your portfolio. These five New Year’s resolutions can make you a proactive investor so you can better control your financial portfolio in 2025.
2024 was a good year for the stock market. It had its volatile moments, which may have led you to sell positions too soon or miss out on big, bullish moves. But now it’s time to leave behind the challenges of 2024 and embrace what’s ahead. The stock market’s future price action rests on uncertainty; the best way to prepare is to take charge of your financial destiny, and to be open to participating and embracing investment opportunities that arise.
Resolution #1: Think Long-Term
With an incoming US president and administration, there will likely be broad changes across the economic landscape. Volatility could be high at times, especially when the impact of changes may be uncertain. Unless short-term day trading is your thing, it’s best not to get hung up on short-term changes.
A massive selloff in one day shouldn’t lead you to make panic selling decisions. Instead, look at a longer-term chart, such as a monthly or weekly one, to get a picture of the overall trend. If an uptrend is still intact, there’s no need to panic sell. Monitor key support levels closely. A downside breakout should be an alert to reevaluate your investments and determine if the reason behind your investment decision is still valid.
The weekly chart of the S&P 500 ($SPX) below shows the uptrend in the index is still going strong. Add your support levels to the chart, add it to one of your ChartLists, and monitor it closely.
FIGURE 1. WEEKLY CHART OF THE S&P 500. The index is trading above its 50-day moving average and the moving averages—50-, 100-, and 200-day—are sloping upward.Chart source: StockCharts.com. For educational purposes.
Resolution #2: Adapt to Changes
With policy changes in Washington, certain sectors and asset classes will outperform others. There’s a lot of talk about tariffs, tax cuts, and geopolitical tensions, but it’s about what policies are implemented and tensions that flare up that will make a difference.
The stock market is overextended and could remain that way during most of 2025 with bouts of volatility. Keep an eye on the chart of the Cboe Volatility Index ($VIX). A rising VIX implies investors are getting nervous, which should alert you to become weary. Keep an eye on other sentiment indicators such as the American Association of Individual Investors Bull and Bear indicators (!AAIIBULL and !AAIIBEAR) and the National Association of Active Investment Managers Exposure Index (!NAAIM). Monitoring sentiment indicators will give you a pulse of the market.
Resolution #3: Review Your Portfolio
Your portfolio is an asset like your home or car. Every so often, it needs a maintenance check, so set up some time to review your investment portfolio. It could be monthly, bi-monthly, or quarterly.
Start with a bird’s-eye view of your portfolio. Is it heavily weighted in some sectors? Are your holdings diversified across different asset classes? Which stocks are your strongest performers? Which ones are your weakest? Are there asset classes you’re not participating in that you should consider? There are several moving parts, which is why it’s important to set up your StockCharts Dashboard panels in a way that helps you monitor the overall market and your portfolio holdings.
It’s also worth broadening your horizons and learning about different trading instruments, such as options. StockCharts has introduced the OptionsPlay Add-On which allows you to select optimum options strategies for stocks. If you’re an options trader, you’ll want to explore this tool.
Resolution #4: Get Organized
Some extra leg work on the front end can save you a lot of time when reviewing your portfolio. Build your ChartLists with all your portfolio holdings. Make different lists if you have more than one investment account. For example, if you have more than one retirement account, create one ChartList for your 401(k), another for your IRA, and another for your Roth IRA.
Once you’ve built your ChartLists you can view them in different ways — Summary (view holdings in a tabular format), ChartList View (stacks all charts so you can scroll vertically to view), and Performance (tabular view of the performances of all stocks and ETFs in your list) — to name a few. Explore the different ways to view your ChartLists and select one that works for you. Think of how much time you can save when you’re more organized.
Resolution #5: Keep a Trading Journal
Making investment decisions can be complicated. Investing involves continuous learning and understanding yourself. Let’s face it — most of your investment decisions stem from emotions and often you forget your reasons for investing in a security. Noting down the thought processes that go through your mind when making investment decisions helps you understand yourself better and makes you a smarter investor.
Reviewing your notes helps you identify which investment decisions were well thought out and which were based on emotions. While StockCharts doesn’t offer a trading journal, you can add comments to your charts. In SharpCharts, under Saved Charts (left-hand menu), click on Chart Comments and add whatever thoughts go through your mind when you view a chart. When you have time to focus on your journal, you can add your comments and other important details.
The bottom line: The stock market is full of opportunities. Have an open mind as we step forward into 2025.
Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.