Opinion: Financial resolutions project prosperity in new year

For the long-term investor: a grandchild or grandchildren to baby-sit, thus precluding his watching CNBC minute by minute to check his investments.

For the younger set in their first jobs: the realization of how much money they can accumulate if they participate fully in their companies’ 401(k) plans.

For the older investors: awareness of all the facts, pro and con, before they buy annuities.

For first-time homebuyers: patience to take the time to establish solid credit scores, accumulate a significant down payment, and read and understand the closing documents.

For Jim Cramer of “Mad Money”: a CD of nature sounds to calm him to a near-hyper state.

For the hedge fund quantitative guys on Wall Street: a realization that if they all use similar black-box methodology, they will simply be a crowd heading for a narrow doorway when the party ends; and that there is also an art to investing – it’s not all science.

For the parent who believes that his child will receive a full-ride academic or athletic scholarship: the decision to count on neither and to begin setting funds aside for college or trade-school expenses.

For all investors, experienced as well as beginning: a disciplined approach that emphasizes strong financial fundamentals and that recognizes the difference between solid companies with attractively priced stocks and the hot stock of the day or week.

For those who travel internationally: a dollar that strengthens against the euro, yuan and pound, ideally without the Fed raising interest rates to make it happen.

For mutual fund investors who buy the fund that has performed best over the last quarter or year: don’t let that be your primary reason.

For the investor who is using an asset allocation method: keep your rebalancing to a minimum, and don’t fall prey to trying to guess which asset type will perform best.

For the investor who owns only U.S. companies: foreign holdings through mutual funds or (exchange-traded funds) in recognition that we live in a time of a truly global economy.

For the “I only buy certificates of deposit” folks: time spent understanding why, especially in a falling interest rate environment, CDs are unattractive and unproductive holdings.

For our leaders in Washington: the book “Free to Choose,” by Milton and Rose Friedman. At $15 a copy, and with there being 100 members of the Senate and 435 in the House of Representatives, that’s a total of $8,025 – too much money to fit into the Christmas budget. But if only I had the funds, it would be money well-spent. The book was published in paperback in 1990 and evidently has been ignored ever since by most members of Congress, or perhaps is just gathering dust on bookshelves. How refreshing it would be if they all read it and considered the messages of how individual freedom, responsibility and choice are continually being usurped by a growing government. Maybe I could take up a collection from like-minded individuals who believe it is time for some rational thinking and action in Washington. Or maybe each of us could send a copy to his or her Representative and Senators. Come to think of it, the President could use a copy, too.

For the readers of this column: have a happy New Year.

Clark Davis is a 37-year investment veteran and CEO of Saint Louis Investment Advisors, a specialized money-management company. He can be reached at cdavis@slia.com.[[In-content Ad]]