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5 Crucial Investing Tips For 2017

Every year when the calendar flips over into a New Year we make those promises to ourselves that this year will be different. This will be the year I get into shape, this is the year I will get my financial house in order -- get out of debt, save more money, etc. -- this will be the year... well, you get the point. The routine and the goals are always the same.

Gym memberships skyrocket and folks come to banks in droves to open savings and investment accounts. When I worked as a financial advisor, the first quarter was by far my busiest time of the year.

But whether it's getting in shape, getting out of debt or saving for retirement I've noticed that many people skip an important step in reaching their New Year's resolutions or goals: they never assess where they're currently at.

This may seem trivial, but reflecting on what put you in your current situation is a critical step in helping reach your goals. If you don't understand the habits and behavior that put you in your current situation, then there's a good chance that at the end of 2017 and entering 2018 you'll be setting the same goals -- spinning your wheels.

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Of course, fully committing to and following through on your goals is another pitfall that causes many people to not reach their goals. But we need to take the time to look back and understand the choices we made that put us where we are today. And if you don't like where you are then you need to make different choices. It could be as simple as not drinking soda or skipping dessert to lead a healthier lifestyle, or cutting the cord on cable and putting that money toward paying off debt or putting into savings.

As Marshall Goldsmith wrote in his book, "What Got You Here Won't Get You There," when it comes to improvement -- whether it's our health or investing or leadership, which is what his book is about -- instead of creating a "To-Do" list when looking to improve try going with a "To-Stop" list.

In order to become a better investor, sometimes all it takes is to stop making the same mistakes we've made in the past, whether it's taking a flyer on a "hot stock" that we overheard about during a holiday party or watching small losses tumble into large ones, putting items like this on your To-Stop list can dramatically improve your results.

Whether or not you decide to make New Year's resolutions, I trust that most of you have a goal of becoming a better investor.

Toward that end, here are five tips that will help keep you in the green in 2017.

1. Ignore The Daily Market Chatter

This first tip is one that I must constantly remind myself to keep in mind, since there's hardly a day that goes by when I'm not either reading or researching something regarding the market or the economy. While it's good to stay abreast of the market, being engulfed in the daily market hysteria causes short-sightedness -- losing sight of the bigger picture or your long-term goals -- and pretty soon you will find yourself trading stocks on a daily whim.

When investing for long-term success, you must think about what will be making money 15 years from now and beyond. It's this premise -- buying companies that are creating our future -- that is part of the foundation of Top Stock Advisor as well as our legacy "Forever Stocks" theme. We want to buy great companies at a great price and hold on to them for the long haul.

2. Understand What You're Investing In

If you were asked about each stock in your portfolio you should at least be able to provide an elevator pitch on what the company does, its market cap, sales and earnings. Beyond that you should also know what piece of your greater portfolio that company provides. In other words, does it give you more exposure to the healthcare industry or the technology sector? Is the stock meeting your expectations? Is it performing well relative to its risks and the overall market? Why did you buy the stock in the first place and is that thesis still valid today?

These are some good questions to ask as you look through your portfolio, or before you buy your next investment. Having a firm understanding of your investments will help with the first tip, as you'll be less likely to be swayed out of a stock or into a stock from the daily market hysteria.

3. Your Best Investment Might Already Be In Your Portfolio

Investors tend to think that they must constantly be adding a new stock to their portfolios. But the truth is that if you have extra money that you would like to invest, your first stop should be your portfolio.

It takes a lot of time to form a solid understanding of a business, and if you've followed tip number two, then you should already have a solid understanding of your holdings. You should know if one of your stocks is currently being undervalued by the market. If it is, then it could be a good time to invest your extra cash into something you already know and own.

So before you take a flyer on the day's "hot stock," look first to your portfolio. Your best bet could be right under your nose.

4. Don't Be Afraid To Sell

This is one of the hardest things for an investor to do. Whether it's selling to capture a gain or cutting a loser short, this phenomenon provides an interesting insight into investor psychology. Selling at a loss is like admitting you've made a mistake, and no one likes to be wrong. On the flip side, booking a profit takes its own toll on an investor's psychology as they wonder if they're going to miss out on future gains.

This causes investors to hold on to a stock for all the wrong reasons. One of the worst pitfalls for an investor is the "it'll come back" or the "I'll sell it when I get back to even" mentality. Just because a stock may have traded at a higher price in the past doesn't mean it will go back to that price. Failing to let go of an underperforming investment will not only cost you capital, but opportunity cost as well.

Have a plan for each stock and stick it. Don't be afraid to sell.

5. Set Small Milestones To Reach Your Ultimate Goal

Whether your goal is to retire by a certain age, make a certain return each year or even lose weight, setting realistic weekly/monthly/quarterly goals will help you stay on track to hitting your bigger goal.

By forming shorter-term goals, not only will your larger goal be more achievable, but the constant reminder will help you stay on track. And don't forget to write your goals down. According to a study done by Gail Matthews at Dominican University, those who wrote down their goals accomplished significantly more of them than those who didn't.

The Best Stocks For 2017 -- And Beyond...

I hope you find these investing tips useful as you form your investing roadmap for 2017. If you find yourself in need of more guidance for the New Year, I suggest you check out my latest report on the Top 10 Stocks For 2017 .

This report is one of the hallmarks of what we believe in as a company, so if you haven't checked it out yet, I urge you to do so now. I can't promise all of this year's Top 10 Stocks will be winners, but our previous picks have delivered gains of 53%, 101%, even 159% in a single year. To learn how to get this year's report, follow this link .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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