Jacob Wackerhausen/iStockPhoto / Getty Images
January is a good time to tune up your behavioural game. Your investment routine, along with periodic actions and reactions, are key factors in your investment results. They’re even more important than picking a good stock or fund, or keeping fees down.
At a time when there are so many unanswered, or should I say, unanswerable, questions about AI, cryptocurrencies, trade and geopolitics, I’ve got five questions that are eminently answerable. They’re not necessarily easy, but if addressed honestly, will improve your long-term returns.
Does my strategy match my skills, experience and available time?
It’s never been easier and cheaper to be a do-it-yourself investor. You have access to great information on the web and can trade stocks in seconds on your phone. But does going it alone fit with your situation?
You need to make sure you have time to devote to the process, week after week, month after month and year after year. The more periods when you can’t (travel; family; work), the less of your portfolio you should manage yourself.
And then there’s skill and experience. You need to have a good sense of valuation, the most reliable predictor of future returns, and portfolio construction. It also helps if you’ve been through a few cycles and seen different types of markets.
If you don’t have good answers to these questions, keep your trading account small and take time to test your approach over a full market cycle.
How to avoid this common DIY investing mistake
What is the objective and time frame for the money?
This is ground zero for any investment decision. Together, these two things determine what risk is for you.
If your time frame is short, risk is stock market volatility. The priority is security and limited downside. If your investment horizon stretches over decades, then stable short-term returns are unimportant. Your biggest risk is not having enough exposure to assets that will grow. In other words, not taking enough risk.
Can I maintain my current risk level through all types of markets?
It’s one thing to have a portfolio that fits with your goals, but theory can be quite different than reality. Can you stick to your strategy in noisy market conditions when emotions are running high? It’s best to assess your staying power ahead of time because your asset mix is only appropriate if it can be sustained.
Look in the mirror and ask how you felt previously when your portfolio was down. What actions did you take during the 2008 financial crisis, during COVID-19 and on Donald Trump’s Liberation Day? Did you stick to your plan in 2025 when FOMO was running rampant? And did you take advantage of weak periods by rebalancing your portfolio?
If you abandon your plan and bail out (or go all-in after being too conservative), there’s a high likelihood it’ll be done for emotional reasons and at the wrong time.
Want to be a DIY investor? What to ask before choosing a platform
Do my adviser and I know enough about each other?
When you put your financial future in someone else’s hands, you need to know a lot about that person, and vice versa. I’m not talking touchy-feely, just basic stuff that goes beyond your goals. Your investment personality, communication preferences and what’s important in life.
Is your adviser or portfolio manager willing to answer all your questions without reservation? After regaling you about the winners, do they also discuss the losers? And do they openly talk about your long-term results and the fees you’re paying?
If you’re not there yet with this person who will shape your retirement, then fix it. Spend more time together. Clarify how you want to be communicated with, and at what level. Remember, there’s only one boss. You.
How to weather the markets in 2026, according to our experts
Who do I rely on to tell me what the stock market is going to do?
Regular readers will know right away that this is a trick question. If you’re basing your strategy on what the market is going to do next month, you’re behavioural game needs work. Timing the market is one of those unanswerable questions.
Tom Bradley is a portfolio manager with Purpose Investments, co-founder of Steadyhand Investment Management, a member of the Investment Hall of Fame and a champion of timeless investment principles.