When you read about my plans for New Year’s Eve, some of you may think I’m a little bit boring.
After all, my wife and I have no plans to party. And it’s not because we’re afraid of contracting Omicron.
It’s something far more fundamental, a move that gives me an edge on Wall Street and millions of Main Street investors as well.
At six o’clock tonight, Tracy and I will once again engage in our favorite annual ritual.
It’s where we have a glass of wine and a fireside chat in which we review how well we did against our annual action plan, including the one I write for our investments.
Indeed, without a written action plan, it’s easy to fall prey to all the confusing headlines out there, of which there will be no shortage in 2022.
And it’s why today, in the first of two parts, I want to set you up for a profitable 2022. I’m going to show you how to write your own Investment Action Plan.
Now then, I expect the media to bombard us at the beginning of the year with negative headlines about inflation, worried about Fed tapering and the hourly freakout about Covid and its variants.
Speaking as someone with 40 years experience dealing with markets, it’s much easier to ignore all the noise out there if have a written plan, one that you check regularly.
We’re trying to avoid panic sells and greed-centric buying based on Wall Street’s hype machine that bedevils so many unprepared investors.
And when it comes to writing an action plan, I speak from deep experience.
For the entire 26 years my wife and I have been married, I have written an annual plan for our lives and one for our investments.
It’s one of the reasons why members of my monthly newsletter, the Nova-X Report, consistently crush the market.
I’m talking about a chip leader we acquired last June 14 that is up 67% and touch-control firm we acquired last March 29 that is up 113%.
Now you know why I like to remind investors that the road to wealth is paved with tech.
And like any journey, you’re more likely to arrive at your intended destination safely, on time, and without getting lost if you have a proper map.
This “map” is essentially what an Investment Action Plan is all about.
I’m speaking from years of experience.
There’s a good reason that an Investment Action Plan breeds success: Just the process of creating the plan – and being honest about your goals, your notions about risk, and about the amount of capital you have to work with – dramatically elevates the odds you’re going to succeed.
With that in mind, let’s go through just what your specific Investment Action Plan for 2022 might actually look like. You’re going to need to:
- Detail Your Goals and Objectives: This section is crucial because your goals – how much you need and when you’ll need it – influence every other part of the plan. It might start out with a statement akin to: “I intend to retire in 20 years, and I know that I will need to have a net worth of at least $2 million to make this happen.” Your objectives might include some near-term goals as well, such as funding your child’s college education, buying a vacation house, setting up a foundation, or travel abroad. Be sure to list all your goals, along with the estimated costs. And don’t forget to include your dreams – buying an antique car, a boat, or that small farmstead. After all, dreams are what make life special.
- Assess Your Feelings About Risk: You need to be honest as you assess your capacity for risk. After all, the greatest investment plan in the world won’t work if you won’t stick with it. For instance, if volatility freaks you out, maybe you should choose investments – such as exchange-traded funds (ETFs) – that offer high average annual gains, but which don’t have the wild swings the underlying individual stocks might experience. On the other hand, if you have ambitious (aggressive) financial goals, or are getting a late start, you’re need to look at faster-growing investments – which, by definition, carry higher risks. Being honest about risk will help you come to terms with this reality.
- Draw a Map: Goals are great, but you must figure out how you’re going to attain them. You need to work out how much you need to be putting away today, tomorrow, and next year in order to get where you want to be. Make sure you’re taking advantage of all that’s available – like the company “match” in your 401(k).
- Start Now: As part of your statement of purpose, make sure you say what you’re going to do in 2022. It might read something like “Invest in quality technology stocks with the potential to double my money.”
Somewhere in your plan, address the specific steps you’ve been putting off.
This could be items like making better use of stop-losses to protect your capital and profits. It might also include a target return for your portfolio – for instance, at least doubling the S&P’s returns.
Let me be candid. If this sounds like a lot of work, it is. After all, we trying to achieve financial freedom, and that’s never easy.
Allow me to make a suggestion that I totally believe can really help you out.
Why not consider a subscription to my monthly tech-investing newsletter, the Nova-X Report?
What that means is that you will be “hiring” me and following my investment action plan that produces a steady stream of double and triple-digit winners.
So, if you are ready to make subscribing to Nova-X a part of your investment action plan for 2022, simply click here to get started with one of my biggest predictions for the upcoming year.
Either way, be sure to check back with me on Friday when I will unveil my 2022 tech forecast and recommend three stocks in three breakout sectors.