It's 2004, and that means it's time for a round of resolutions for the year ahead.

You may already be looking to slim down, shape up, or eliminate destructive habits in your life. While you're at it, here are 10 New Year's resolutions for investors that will, if followed, absolutely shape up your portfolio and eliminate some of the bad habits that could prevent you from reaching your investing goals.

1. Write down your goals
This one is simple, but very powerful. You can't very well reach your goals if you don't know what they are, now can you?

But more than knowing what you want, it has been shown that the mere act of writing down your goals makes it much more likely that you will achieve them. In fact, a well-known Harvard University study reported that 3% of a given study group regularly wrote down their goals, while 14% had goals but did not write them down, and 83% did not have clearly defined goals. The results were amazing: The 3% who regularly wrote down their goals accumulated more wealth than the other 97% of the study participants put together!

2. Get your finances in order
I know this is basic, but I can speak for myself here. I can (and do) spend all day looking for compelling new investment ideas, but I don't spend enough time reviewing my spending habits or ensuring that I have enough insurance.

That's why one of my resolutions this year is to get my own financial house in order. If you're spending your time admiring your stock portfolio while allowing high-interest credit card debt to eat away at your wealth, you're not going to accomplish your financial goals.

Before you worry about stocks, get your finances in shape. Take advantage of the many resources available on The Motley Fool's website as you need them.

3. Determine your strategy
Investing is more than just collecting a bunch of stocks in a portfolio. Your investments need to fit a strategy, and your strategy needs to fit your goals, which you will have hopefully defined (and written down) in our first step above.

Whatever your goals, there is a dizzying array of choices -- index funds, actively managed funds, exchange-traded funds, individual stocks, and so on -- that can be used as building blocks to achieve them. Decide now what your strategy will be for building wealth for retirement, saving for that dream home, college for the kids, or whatever.

Obviously, selecting individual stocks for long-term growth is likely to be only one component of your personal financial strategy for success. Make sure you've done your homework in determining what investments are best suited for each goal, and then commit to it. Once the up-front work is done, semi-annual or annual check-ups and minor modifications should be all that is required.

4. Buy businesses, not stocks
Once you've decided that individual stocks are a part of your strategy, the next resolution is simple: Remember that you are buying businesses, not just pieces of paper that are subject to random price fluctuations.

I encourage you to approach each stock you purchase as if you were buying the entire business (at the currently quoted price) with the expectation that you'll own it for a decade. If you approach each stock purchase in this manner, you'll likely take the time to really understand the business, the industry, the opportunities, and the threats faced by the company.

And you'd only make the purchase if you could justify the price. The easy exit allowed by the stock market to discard your mistakes should not be used as an excuse for poor purchase decisions.

5. Play the percentages
Let me make this as simple as I know how: The extent to which you will succeed in achieving superior investment returns over time will be dictated by the difference between the price you pay for your stocks and the true business value generated by the underlying companies over time.

What is true business value? Simply put, the value of a company lies in its future profitability, otherwise known as free cash flow. Habitually overpaying for stocks relative to a company's ability to produce cash will produce reliably disastrous results over time. Make a habit of buying stocks at a discount to true business value. Acquiring a reliable and growing flow of future earnings, dividends, and cash flow at the best price is what investing is all about.

If your portfolio is littered with stocks of companies with no profits and no cash flow, the odds are certainly against you. It's OK to have one or two speculative investments of appropriately modest size in a portfolio, but the best way to succeed in investing is to figure out how to get the most earnings and cash flow bang for your investing buck.

6. Read the latest annual and quarterly reports
This one is simple. Every publicly traded company files an annual report on 10-K with the SEC, describing its business in great detail. Before you purchase any stock, make it a policy to print out and read the latest available 10-K. I guarantee you that there will be something in there that you need to know. Also, read the latest quarterly 10-Q filing to ensure that you are up to speed on the most recent developments.

I promise you that taking an hour to do this won't cause you to miss out on any true investing opportunities, but it will prevent you from making impulse purchases based on nothing more than a mention on CNBC.

7. Keep notes
When you buy a stock, write yourself a quick half-page note on why you are buying it, why you think it is worth today's price, and at what point you might be willing to sell. And every time you consider making a move, review what you've written. Make it a habit to do a postmortem after you've sold the stock in order to maximize the learning opportunities that each experience has to offer.

8. Do a quarterly checkup for each stock you own
Companies provide quarterly updates on how they are performing. You should review them on an ongoing basis, adding to your notes any thoughts you have. Each individual stock you own requires this 30-minute quarterly checkup. If you find that this maintenance work is too much to handle each quarter, you probably own too many stocks.

9. Make the market your servant, not your master
Volatility gets a bad rap. If you let them, your emotions will turn volatility into your worst enemy. On the other hand, volatility creates opportunity for the patient, businesslike investor. The best treatment of how to make the market your servant rather than your master is Chapter 8 of Benjamin Graham's The Intelligent Investor. If you haven't read it, make sure you do so this year.

10. Be patient, have fun, and remember the important things
I remember Charlie Munger reminding the audience at a Berkshire Hathaway (NYSE:BRK.A) meeting that "there is more to life than the passive accumulation of wealth." It is worth reminding ourselves that we invest to improve our quality of life, and that money provides us with opportunities to improve not only our own lives, but to contribute to the lives of others and to support many noble causes.

Investing represents a road leading somewhere, and it is important to ensure that the destination is one worth striving for.

Zeke Ashton has been a longtime contributor to The Motley Fool, and is the managing partner of Centaur Capital Partners, LP, a money management firm in Dallas, Texas. At the time of publication, Zeke did not own shares of Berkshire Hathaway. Please send your feedback to