Resolutions and Portfolios: Creating Habits toward True Improvement


As a new year begins, many use this time to draft resolutions and envision a different future for themselves. Often, such personal promises revolve around fitness, occupation, relationships, and finance. For one, this annual process brought an odd realization about wardrobe, and implications for life.

On a much warmer than usual December afternoon in urban Michigan, I took a break from a few errands and activities to clear my head via a long walk. I use my walks to meditate — particularly about finance. I did not reach for an iPod or mobile device. Instead, I finished what I was doing and headed straight for the door.

Getting into my exercise, and deeper into thought, I assertively focused my mental energy on what had just transpired. Prior to my walk, I had decided to give away a pair of shorts. The decision struck me as strange for its finality. This particular article of clothing was the last physical memento of my days, almost twenty years ago, as an NCAA college basketball player. It was a time in my life that produced many memories, and certainly many lessons. But, what caused such profound thought had nothing to do with nostalgia. Actually, though my decision to donate the meaningful clothing piece was difficult at the time, it now — only minutes later — did not weigh on me at all. This is what troubled me — the ease of moving on, and imparting change so quickly and almost effortlessly.

In life, we spend much time making decisions. We look at a pair of shorts and stress over their sentimentality. We annually undertake the repetitive work of pondering resolutions and life changes. We probe our inner desires. We give wonderful attention and energy to our choices and their potential outcomes. But, in doing so, we ignore a critical aspect of making such decisions.

For in life, there are no wrong decisions — a cliché we have no doubt heard many times before.  This truth, however, comes void of a vital understanding that leaves us making the same resolutions time and again, new year after new year. It is not choosing to become healthy or learn a new language that plagues us. It is not concluding every January 1st that we will spend more time with our kids or be less emotional with our investments. It is, definitively, our ability to actually carry through on our choices that is crucial and oh so difficult for most.

A pair of shorts presents a perfect backdrop for one of life’s biggest challenges — creating new habits. We treat our resolutions like we treat cleaning our closet. But, they are nothing the same.  Life’s trick: It is equally difficult to let go of memories brought by clothing as resolving to learn a new language. But physical change such as donating old basketball articles has enormity in the initial decision, followed by the satisfaction of its quick completion. While other choices require we teach ourselves, day and again, to adopt new habits. Being kind to your spouse or reading more often, takes care and discipline that cannot arrive overnight. In such cases, the decision is actually the easy part — the execution posing the real challenge.

Portfolios and life have so much in common. We walk randomly through life as we do through markets. We play favorites, we are emotional, we are loss averse, we are over-committed, we compare ourselves to others, we unconsciously practice value attribution, and we certainly think we are smarter than reality. And in life, just as in portfolios, we must change our actual habits to evolve. We cannot simply make a decision and donate it. Life, and investing are much more intellectually complex. We must make choices and then realize the work that follows. It takes discipline and dedication to accomplish our worthy goals.

Investing and life are full of pitfalls; around every corner a new trap seeks to sway us off course.  Most paramount is the self-inflicted inertia hidden in our subconscious. The desire for new outcomes dictated not by our desire, but our ability to adopt new habits. Humans are very good at the initial accomplishment — imagining the results we want. But, we are innately bad at what it takes to achieve them. In your portfolio, and in life, it is your behavior, not your initial choices that sabotage. Anyone can crave a certain life or rate of return. But achieving your goals takes much more consistency, patience, and dedication. Shorts can be given away in an instant, but real accomplishment exponentially is more difficult to attain. By realizing this important difference — that “decisions” alone will accomplish nothing — we can hope to turn our resolutions, desired portfolio outcomes, and new habits into reality. Resolve to remain dedicated to creating new habits, and watch your portfolio and life reach new heights.

Jonathan Citrin is founder and CEO of CitrinGroup, an investment advisory firm located in Birmingham, MI. He is an adjunct faculty of finance in the School of Business at Wayne State University.

Founded in 2003, CitrinGroup specializes in portfolio management and advises clients on investment planning.

Contact: 248-569-1100 or