Most investing mistakes happen not because people lack knowledge, but because they lack a plan. When markets move, when headlines shout, when friends share stories of gains or losses, having a written set of rules creates an anchor.
This template provides example rule sets that some investors use. They are not recommendations. They are starting points for thinking about what your own rules might look like. The goal is to help you articulate your own commitments before you need them.
This is general educational information, not personal financial advice.
Why Written Rules Matter#
A rule written in advance is different from a decision made in the moment.
When markets fall 20%, the temptation to sell is strong. When a particular asset has risen sharply, the temptation to chase is strong. These impulses feel rational at the time. They rarely are.
Written rules create friction. They force you to check your current impulse against your past reasoning. They do not guarantee you will follow them, but they make it harder to pretend you never had a plan.
The best time to write rules is when things are calm. The worst time is when things are not.
Structure of a Rule Set#
A useful set of investor rules typically covers:
- Contribution rules: When and how much to add to investments
- Downturn rules: What to do (and not do) when markets fall
- Review triggers: When to revisit the plan
- Security rules: How to protect accounts and access
- Do-not-do rules: Explicit boundaries to prevent mistakes
The examples below show how different people might structure these. They are illustrative, not prescriptive.
Example A: Conservative Approach#
This example reflects someone who prioritises stability and minimal complexity.
Contribution Rules#
- Contribute a fixed amount each pay cycle via automatic transfer
- Do not adjust contribution based on market conditions
- Only invest after maintaining a buffer of six months of essential expenses
Downturn Rules#
- Do not check portfolio more than once per month during a downturn
- Do not sell any holdings during a market decline of less than 40%
- If tempted to act, wait 48 hours before making any change
Review Triggers#
- Review allocation once per year, in the same month each year
- Review if a major life event occurs (job change, dependants, property purchase)
- Do not review in response to news or market movements
Security Rules#
- Use a unique password and two-factor authentication on all investment accounts
- Do not access accounts on public Wi-Fi
- Store recovery codes in a secure location separate from devices
Do-Not-Do Rules#
- Do not invest in individual stocks
- Do not use leverage or margin
- Do not act on tips from friends, family, or social media
Example B: Steady Approach#
This example reflects someone comfortable with moderate complexity and periodic adjustments.
Contribution Rules#
- Contribute a percentage of income each month via automatic transfer
- Increase contribution by half of any pay rise
- Maintain a buffer of three to four months before increasing investment rate
Downturn Rules#
- Continue regular contributions during downturns without increasing or decreasing
- If portfolio falls more than 25%, consider adding a one-time additional contribution if cash allows
- Do not sell based on market conditions; only sell for rebalancing or genuine need
Review Triggers#
- Review allocation twice per year
- Review if risk tolerance or time horizon changes
- Review if any single holding exceeds 30% of portfolio
Security Rules#
- Use a password manager for all financial accounts
- Enable transaction notifications
- Review account statements quarterly for unexpected activity
Do-Not-Do Rules#
- Do not hold more than 10% in any single company
- Do not invest money needed within the next three years
- Do not make changes within 24 hours of reading financial news
Example C: Growth-Leaning Approach#
This example reflects someone with a long time horizon and higher tolerance for volatility.
Contribution Rules#
- Contribute as much as cashflow allows after buffer and expenses
- Increase contributions aggressively during market downturns if cash is available
- No upper limit on contribution rate while employed
Downturn Rules#
- View downturns as opportunities to add at lower prices
- Do not reduce exposure during falling markets
- Accept that declines of 30% or more will occur and are not signals to exit
Review Triggers#
- Review allocation quarterly
- Rebalance if any asset class drifts more than 10% from target
- Review if approaching a major life transition (retirement, property, dependants)
Security Rules#
- Use hardware security keys where supported
- Keep investment accounts at institutions separate from everyday banking
- Maintain a written record of all accounts and access methods
Do-Not-Do Rules#
- Do not panic sell under any market condition
- Do not use leverage beyond what can be comfortably serviced in a downturn
- Do not invest in assets that cannot be explained in one sentence
Building Your Own#
The examples above are starting points. Your rules should reflect your own situation: your income stability, your time horizon, your temperament, your life context.
Some questions to consider:
- What would make me panic? What rule could prevent that?
- What have I done in the past that I regretted? What rule would have stopped it?
- What do I need to protect myself from myself?
The most useful rules are not the cleverest. They are the ones you will actually follow.
Keeping a Record#
Once you have written your rules, save them somewhere accessible. Date the document. Review it periodically. Update it when your circumstances change, but note why.
Over time, this becomes a record of how your thinking has evolved. It also creates accountability: you can see what you committed to, and whether you kept those commitments.
Some people call this a personal investment policy. The name matters less than the practice.
Summary#
Written rules create structure for decisions made under uncertainty. They are most useful when written in calm moments and followed in stressful ones. The examples here (conservative, steady, growth-leaning) are illustrative, not prescriptive. The best rules are specific, honest about limitations, and designed to be followed, not admired. Writing them down is the first step. Keeping them is the harder part.