5 ways you can intentionally apply systems to your investment strategy


Recent research shows that only 8% of people who set goals achieve them. We already know we cannot rely on motivation to achieve our goals.

That’s because goals are hopes put to paper. We can’t achieve our financial goals unless we establish a personal system to execute our investment strategy.

You may not realize it, but your personal cash flow is already a system. As is your investment strategy. The only problem is that if you weren’t deliberate about it, then it’s passive and without a plan.

But smart investors know that a deliberate investment system is critical to working towards their financial goals. Especially if you’ve already set your intentions.


Here are 5 ways you can apply systems to your investment strategy:

1. Set the foundation for your investment strategy

2. Organize what matters to you

3. Pressure test everything

4. Vet possible assets

5. Focus on your goals


1. Set the foundation for your investment strategy

Your investing beliefs will determine your systems and plan, so don’t skip this part. Here’s how you can set up your financial foundation:

1. List the many decisions you must make when investing.

Organize them in descending order of importance. Keep in mind, this can also apply to spending, saving, and borrowing.

Think about things like: do you understand the industry? Does it align with your risk tolerance? Is this for your long-term, mid-term, or short-term strategy?

2. Grab the #1 most important investment factor and put it at the top of a mind map.

For example, smart investors must choose their level of commitment to long-term investing.

This decision distinguishes if a person wants to play a game for short-term wins, dopamine hits, and that high-risk/rare-reward rush…or if they prefer to contribute smaller amounts consistently over time.

3. Map your next decision.

Choose the next most important factor that determines your willingness to invest in a company. It should be the next one on your list.

Add it to the following line of your decision tree.

Continue until all the factors listed in step #1 are in your mind map.

4. Populate the flow chart with “no” outcomes.

We want to give ourselves action items to become smarter investors, no matter our success.

Deciding what kind of investor you’re going to be – and how you’ll live that out in practice – is by far your most important part of a system for personal finance.

Creating investment boundaries can help you make faster and more thoughtful decisions, all according to your goals.



2. Organize what matters to you

Smart investors know that what they read affects their mindset and financial behavior.

But the smartest ones don’t allow news stories to bombard them at random.

Think about it like your productivity. You build systems to get through your to-do lists and reading lists. You note what you will get done, and you focus on it.

When building an investment strategy, curate your inputs so your attention goes to only the most relevant and important updates. These tactics can help you get started:

1. Curate your emails.

Are you subscribed to newsletters you trust? What biases do these newsletters and authors have? How many investment newsletters can you realistically read? Think about what information you do and do not need to stay informed.

Consider signing up for The Investor’s Mindset: an actionable monthly newsletter that helps smart investors get smarter.

2. Overhaul your Twitter usage.

Instead of mindless scrolling and a random feed, you can organize who you follow on Twitter into curated lists.

Need inspiration? We frequently build lists of people to follow on Twitter. You can follow lists like ours or even build your own.

3. Take advantage of downtime.

Traditional media channels aren’t the only way to get your business content. Podcasts are another great way to absorb the information you need to stay informed.



3. Pressure test everything

If we trusted every new investment vehicle that came our way, we’d end up in financial situations that may not match our risk tolerance.

And a mismatched risk tolerance could mean trouble sleeping in the case of volatility, no matter how temporary.

Instead, we must research the types of investment opportunities available.

Develop a checklist to ensure this test supports your overarching personal system. You can start with a quick internet search, open the Research tab on your M1 app, or dig into a company’s financials.

Everyone’s research process is different.

At the very least, a good process includes a place to store your informational sources and a hub of your post-research knowledge.

When you build research and testing into your system, you can make investment decisions that better align with your goals.



4. Vet possible assets

Once you’ve used your system foundation to determine your investment strategy and you’ve chosen a brokerage, it’s time to vet the assets available.

Create a checklist to complete against any potential stock. Everyone’s list will look different but should include checks like:

  • This asset has a proven record of performing the way I want my assets to perform.
  • I have the patience to allow this asset time to appreciate (and, if applicable, returns to compound).
  • This asset is not identical to all my other investments.
  • Data show that this stock is somewhat or definitely undervalued.


5. Focus on your goals

We all encounter tantalizing distractions that tempt us to act impulsively with our money. The same thing goes for our time.

We could try to muster up the sheer will to fight these temptations, but motivation isn’t a given. So, we put effective systems in place to help us.

And although your system may be automated, mark your calendar for regular personal finance reviews. Play some music, pull out your goals and systems, and review the feedback you’ve received from your losses and wins.

For your investment strategy, these reviews may happen once a quarter. Other parts of your financial life (like your budget) may need a weekly review.



Build your investment system

Try a few (or all) of these personal systems for smarter money management and better investing moves.

If one of them doesn’t work, change it. Customize it to fit your unique goals and style. But don’t ditch systems altogether.

When motivation fails, systems are often the only thing standing between us and our long-term financial goals.



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