Do you want a repeat of 2016?

The year has been a reasonable one so far for Australian investors. The S&P/ASX 200 (Index:^AXJO) (ASX:XJO) has returned nearly 4% since January 1, compared with a negative 6% return for last year. Unlike recent years however, the big winners have been mining companies that have been out of favour for quite some time now, meaning that most investors may have returned less than the average 4%.

Here are six actions you can take before the new year starts to get yourself off on the right foot:

1: Get rid of your lowest-conviction stocks

These are the companies that you cringe at a little when you open up your portfolio, the ones you sometimes wonder “will the share price ever recover” or “I can’t remember why I ever bought them”.

If you have no faith in the company or share price recovering, why keep it? Do you reasonably expect Lynas Corporation Ltd (ASX: LYC) to pose a remarkable comeback in 2017? Last year I questioned whether Lynas would be able to turn it around in 2016. It did not.

2: Reassess your risk tolerance

The old “sleep at night” test is important for both your sanity and your portfolio. If you’re holding smaller, riskier companies where the payoff is likely a number of years away, you shouldn’t have too much trouble watching the share price jump around. XERO FPO NZ (ASX: XRO) is a good example of this. If you can’t sleep, consider selling these volatile stocks and buying a less volatile stock or an ETF.

3: Step back and think about what 2017 holds

I like to take a macro view before I make a micro (stock-based) decision. As with Quickflix above, and Metcash Limited (ASX: MTS) back in mid-2014 I looked at where I thought the industry was heading before buying an individual company. Metcash and Quickflix weren’t (in my view) able to challenge their big rivals in the year ahead despite looking ‘cheap’. Will TPG Telecom Ltd (ASX: TPM) be able to challenge Telstra Corporation Ltd (ASX: TLS) in 2017’s NBN-related battle?

4: Don’t ask your friends over Christmas

This is obvious, someone will suggest a gold explorer or a company pioneering the cure for all types of cancers in the next 12 months. It’ll probably end in tears.

5: Review your decision-making process

If you’re the sort of person that takes stock tips from friends and relatives, then you need to review your decision making process.

Also, write a step-by-step purchasing checklist (the Motley Fool can help with this)  so that you can record why you made each purchase and sale.

Finally, get some stock ideas:

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Motley Fool contributor Andrew Mudie has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.