In investing, the only perfect knowledge is looking back. The problem is we live today and look to the future so there is always a large challenge in doing it better over the years. John Heinzl writing in the Globe and Mail offers a number of resolutions for you to bring to the decision making process after you have picked your stocks.

1. Be An Owner, not a trader.

If you are a home owner, do you wake up each day thinking about selling your home? Why do you want to sell your stocks? If you pick the best of the companies and they are doing well in terms of sales, profit and growing dividends do you need to sell them? Being a trader increases your fees and you may be selling for no good reason – have a reason.

2. Accept Market Volatility

Stocks prices go up and down. The stock market will go up and down, but it you picked the best of the breed stocks, you do not have to worry about them, because you have a longer time horizon.

3. Own high-quality companies

If you go into the stock market trying to get rich quick, you will likely lose. If you go into the stock market trying to buy profitable companies that should be around for decades to come, then you will win. When the market goes down, it is a great time to look at and buy these profitable companies because they are profitable they will go up faster when the market goes up.

4. Be Patient

Time and compounding are your biggest allies as an investor. If you can get compound interest working for you, you need to do very little to earn money.

5. Reinvest dividends

If you do not need the cash, reinvest the dividends into the market whether it is the same stock, the same fund, or new high quality dividend stocks. Over time the growth and size of your portfolio will increase.

Linking to dividend paying stocks, the trick is buy the highest quality stocks or best in the breed and wait. As long as the company is doing what it has in the past to generate profits and is consistent doing it, buy waiting your wealth grows. If you believe their business model needs to change, change stocks – there are many alternatives in the market.

There are more questions than answers, till the next time – to raising questions.