Here’s how to make your New Year Financial Resolution a Reality in 2016

In many regards, 2015 was a great year.

195 countries around the world endorsed the Paris agreement to limit climate change…

NASA confirmed the presence of water on Mars…

The Hawthorn Hawks pulled off the first three-peat in the AFL since the Brisbane Lions earlier this millennium…

And of course, the new Star Wars: The Force Awakens film hit cinemas late in December, pleasing fans of the Galaxy on a universal scale.

But for most Australian investors, 2015 was a year many would be happy to put in the rear-view mirror.

First, there was the continued collapse in iron ore and oil prices, making those entire industries something of a minefield.

The Greek debt crisis continued to wreak havoc on financial markets around the world.

And there were the fears leading up to what would become the U.S. Federal Reserve’s first interest rate hike in nearly a decade in December.

It was a volatile year for investors, whereby not even our blue chip shares provided the support we’d come to expect.

In fact, they were the ones doing most of the damage!

Take the Big Four banks. Following years of outstanding returns, they found it more difficult to grow earnings and please investors.

They also came under the microscope of the Australian Prudential Regulation Authority, or APRA, which imposed tougher regulations which could further impact shareholder returns.

Then there was Woolworths Limited (ASX: WOW). Numerous profit downgrades, further bad results from Masters and Big W and the loss of their CEO saw the retailer’s shares plummet.

Much has already been said about BHP Billiton Limited’s (ASX: BHP) fall from grace while Telstra Corporation Ltd (ASX: TLS) shares also shed 6% for the year.

In reality, we were lucky to get away with an annual loss of just 2%.

It could have been much worse had it not been for a belated Santa Rally — the S&P/ASX 200 (ASX: XJO) was sitting on a loss greater than 9% for the year roughly three weeks ago.

Of course, we’re not in the share market to lose money.

We want our wealth to climb steadily, over time, but down years come part and parcel with the good times.

You’ve gotta be in it to win it, as they say…

That being the case, long-term ‘Foolish’ investors have no doubt been wading their way into the market in recent months, taking advantage of some of the bargains on offer…

I know I certainly did. I bought shares of Retail Food Group Limited (ASX: RFG), exploiting a share price that had nearly halved since early March.

As far as I can tell, the quality of the underlying business hadn’t changed.

Maybe investors just got cold feet following a strong run up in price.

Or maybe they didn’t realise it was offering a 5.4% fully franked dividend yield? Or that it has excellent economics and strong growth potential?

Who knows…

Either way though, I’m now a happy shareholder. I may even look to increase my stake sometime soon, especially if they’re still trading around their current level.

Then again, there are plenty of other great companies I’ve got my eye on right now. After all, the best time to buy shares is when others in the market are happy to sell them at a discount.

To be clear, I’m not saying that now is the time to go out and buy just any old stock.

Some are still overly expensive, while there are entire industries investors would be wise to continue avoiding in 2016.

Still, 2016 could be an excellent time for investors to put more money to work, or make their New Year’s financial resolutions become a reality.

Indeed, reported that nearly 70% of Australians made financially-focused promises to themselves when the clock struck midnight on Thursday night, marking the beginning of 2016.

That’s according to Westpac’s 2016 New Year Resolutions Report, which determined that individuals are planning to cut their expenses, reduce their impulse buys and create a budget.

They’re all great ways to save money in the long-run, so long as they’re realistic and achievable.

For instance, setting $500 per month aside for investing will be attainable for some individuals, whereas $50 might be more feasible for others.

Reducing your debt or cutting your credit card in half might also be viable (or necessary) options for some, while going out for dinner once a week rather than twice could also help you save for a more financially sound future.

Live within your means and save what you can, and the gains over the long-run could be very rewarding.

With interest rates set to remain low for the foreseeable future, and with Credit Suisse forecasting a long awaited return to 6,000 points for the ASX 200, investing in the share market could also be one of the best decisions you make in 2016.

Personally, I’m looking outside the traditional blue chip shares – the ones that struggled in 2015 and could continue to lag this year as well.

Instead, I’ll be focused on more companies like Retail Food Group. Those with strong balance sheets and strong growth prospects. Those which I believe can generate decent capital gains and fat, fully franked dividend yields.

Foolish Takeaway

Investing in the share market takes time and patience. The research necessary to make sound investment decisions can also be arduous, which is something a lot of individuals don’t have time for.

Rather than giving up on your New Year’s resolutions, it could pay to outsource that work to someone with a proven track record and a time-honoured approach. Someone whose investing style is aligned with your own investment goals and philosophy.

Indeed, you’ll find that at Motley Fool Dividend Investor, run by our resident dividend expert Andrew Page.

For just $99 for the first 12 months (not to mention a full 30-day money-back guarantee if you’re not completely satisfied), this service could be just what you need to work towards a financially sound future, and to profit from the share market in 2016.

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Motley Fool employee Ryan Newman owns shares of Retail Food Group Limited. The Motley Fool Australia owns shares of Retail Food Group Limited.

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