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Here are 5 New Year’s resolutions to boost my Stocks and Shares ISA in 2023

Group of friends celebrating together the end of 2022 and the new beginning in 2023.
Image source: Getty Images

As the year draws to a close, it’s time to review the performance of my Stocks and Shares ISA, and see what lessons can be learned. With significant exposure to the UK economy, and some badly-timed purchases just prior to Russia invading Ukraine, it hasn’t been a good 12 months.

So, as we move towards 2023, here are my five New Year’s resolutions to make me a better investor.

1. Stop looking at the market every five minutes

I have developed a bad habit of checking share prices several times a day.

This is dangerous because it sometimes puts irrational thoughts into my mind. It’s easy to panic if a stock is performing particularly badly during a given day. In these circumstances, I have often been tempted to make a rash decision and sell.

2. Keep reinvesting those dividends

The key to building long-term wealth is to re-invest dividends.

A study by IG found that £10k invested in the FTSE 100 at the start of 1986 would have grown to £53,394 by the end of 2020. However, if the dividends received had been reinvested, the initial stake would have grown to £195,852.

I intend only to invest in stocks that have a proven track record of paying a healthy dividend.

I’m also going to resist the urge to withdraw any dividends received from my ISA.

3. Don’t try to time the market

I’ve sometimes been tempted to buy a stake in a company after a large fall in its share price.

Often the market over-reacts to a piece of news which, although not good, is usually not that bad. The shares then appear to be a bargain. But, this is not always the case and a large drop may be the start of a longer-term decline. It’s important that I stick to my other investment principles, even if a share looks to be a bargain.

This brings me to a broader point.

As an amateur investor, I must accept that I will never be smart enough to purchase shares when they are at the bottom of a cycle, and I will never be brave enough to sell at the top of the market.

4. Think, think, and think again

I must never act in haste.

A few years back, I bought shares in Greatland Gold. It seemed as though everyone was talking about the company, and it was fashionable to invest. But, I didn’t do my research properly.

Although I doubt I will ever get my money back, it’s proved to be a valuable lesson.

5. Accept I might be unlucky

The war in Ukraine has set me back a few months. But, I don’t have a crystal ball so I must stop beating myself up for being unlucky with my timing.

I must remember that investing is for the long term. There will inevitably be some troughs along the way, but I only plan to buy shares in high-quality companies that should ultimately prove to be winners.

Here’s to 2023 …

Hopefully, 2023 will be a better year for my Stocks and Shares ISA. But, with the UK economy already in recession, this is not guaranteed.

However, by sticking to these resolutions, I should be able to weather the worst of the economic downturn.

Happy New Year, everyone!

The post Here are 5 New Year’s resolutions to boost my Stocks and Shares ISA in 2023 appeared first on The Motley Fool UK.

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James Beard has positions in Greatland Gold Plc. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Motley Fool UK 2022