🚨 Creating Your Own Investment Rules, When You Have Principles, You See the Path

Day 006 | US Stock Investment Guide for Beginners | 2025.12.19

📌 Creating Your Own Investment Rules: When You Have Principles, You See the Path

💬 Investing is not just about chasing profits. It is about setting your own standards and principles and practicing them consistently over the long term. Good investment principles become a guiding light for investors even in confusing markets.

Creating your own investment rules is essential for beginner investors. It helps you make stable returns through logical decisions without being swayed by emotions.

1️⃣ Terms and Background

Investment rules are a framework of investment strategies that investors design to match their goals and situation. These rules play an important role in helping you stick to long-term goals without being shaken by short-term market volatility.

One common mistake beginner investors make is repeatedly buying and selling based on market movements without clear principles, which lowers their returns.

To reduce these mistakes, you need to understand and apply these basic investment principles:

• Diversification: Avoid putting all your money in one stock or one sector.
• Long-term investing: Aim for stable long-term results rather than short-term gains.
• Remove emotions: Set clear standards so you are not swayed by fear and greed.

2️⃣ Investment Principles and Key Guidelines

Consider these elements when creating your own investment rules:

• Set investment goals: Set specific investment amount, target return rate, and investment period. For example, you can set a goal of 7% average annual return over 10 years.
• Risk management: Set standards to reduce losses. For example, set a rule to sell if a stock's loss exceeds 10%.
• Buy and sell criteria: Avoid blindly following price increases. Set target prices and selling points in advance.
• Market review schedule: You don't need to check the market every day. Set a regular schedule to review your portfolio.

3️⃣ Specific Action Strategies

Action Strategies

1. Write down investment goals and principles
   • Use a notebook or investment diary to record your own investment principles.
   • Example: "Invest a fixed amount monthly through dollar-cost averaging", "Limit high-risk stocks to within 10% of total investment".
2. Execute diversified investing
   • Combine ETFs and individual stocks for investment.
   • Distribute assets by sector to prevent being too focused on one industry.
3. Practice emotional control
   • Set buy and sell criteria in advance so you don't respond emotionally to market volatility.
   • Use an investment journal to avoid panic selling or excessive greedy investing.
4. Regular reviews
   • Review your portfolio monthly or quarterly and adjust according to your goals and principles.
   • Record your performance and analyze which principles were effective.
5. Continuous learning
   • Read investment books or take courses to develop your investment principles.
   • Consistently observe global market trends and new investment trends.

4️⃣ Q & A

Q1. What rules must beginner investors follow?

A: It is important to set principles for diversified investing, long-term investing, and not being swayed by emotions.

Q2. Do I have to strictly follow all investment principles?

A: Not all rules may be perfect, but the habit of making decisions based on principles is important. You can adjust rules according to market conditions when necessary.

Q3. Why should I write an investment journal?

A: An investment journal helps you record what decisions you made, review your mistakes and successes, and make better decisions in the future.

Creating your own investment rules is the starting point of successful investing. If you practice consistently and build experience, you can complete your own investment philosophy without being shaken by market changes.

View Contents

• Go to Guide