The past year has been an abject lesson in stock market volatility. No matter what type of stocks you own, they are probably worth a lot less now than they were a year ago.

That does not necessarily mean that you made a mistake. Stocks don’t always go up. And since nobody knows exactly when the market will reverse direction, sometimes you have no choice but to ride out a rough year like 2022.

As an investor, there are many factors beyond your control that affect the value of your portfolio. You have no say in central bank monetary policy, nor can you put an end to the war in Ukraine.

But there are some things you can do mitigate the damage those factors can do to your portfolio. Here are three things you should resolve to do this year as an investor to ensure that you are doing everything possible to accomplish your financial goals.

Understand What You Own

First, you need to understand what you are buying. As a long-time financial advisor, I can personally attest to the fact that most investors I met with had very little understanding of what was in their portfolios.

Often a client would ask me to review their “stocks”, but all I’d see are packaged products like mutual funds and annuities. When I pointed out that they didn’t own any stocks at all, their typical response was that they were all the same thing in their mind.

Hopefully, you already know that there are significant differences between stocks, mutual funds, annuities, and all other investment products in terms of cost, liquidity, and tax consequences.

If you don’t, then that is the first thing you should resolve to do this year before making another investment of any sort. There are a lot of good (and unbiased) books on the subject, so take the time to read one. It will be well worth it.

Clearly Define Objectives

Second, you need to have a clearly defined objective in terms of your investment strategy. More often than not, when I asked clients for their investment objective a typical response was, “Well, I’d like to make as much money as I can.”

Okay, I think we can all agree on that. But how much risk are you willing to take to achieve that return, and how soon will you need that money? Most importantly, how much of that money are you willing to lose if the market performs badly?

If you haven’t given those issues much thought, then I’d suggest you think hard about which of your financial objectives are truly “non-negotiable.” Those may include items such as being able to pay the mortgage or send your kids through college.

Then, list the ones that are “nice to have,” such as buying season tickets to your local NFL team or taking a cruise every year; and then prioritizing your investment strategy accordingly.

Use a Coherent Approach

Third, you should have a single, coherent approach to managing your portfolio so that it doesn’t end up becoming a mishmash of stuff you read about on the Internet, heard about from a friend, or was pushed on you by a commission-driven salesperson. There’s a chance that will work, but if probably won’t.

It is virtually impossible to accomplish proper portfolio diversification and risk mitigation if each component of your portfolio is selected independently of the others. Most asset classes have known historical relationships to one another and can be mixed and matched accordingly.

Other asset classes, such as cryptocurrencies, haven’t been around long enough to predict how they will behave relative to more established asset classes. In those cases, they should be viewed as speculation and not as a portfolio diversifier.

Even though these three things may seem obvious, I’d estimate that about three-quarters of the clients I met with could not honestly say that had achieved all three. In fact, less than half of them had even gotten two of them right. I don’t say that to be mean, but to make a point: Knowing what to do, and actually doing it, are often two very different things.

As you look ahead to 2023, resolve to accomplish those three objectives this year: understand what you own, have a clearly defined investment strategy, and use a coherent approach to managing your entire investment portfolio. If you can do those three things, it should be a very happy new year indeed.

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