Investment Plan: How to Write Yours on a Single Page

An investment plan is a single written page that settles, in advance, what your money is for, how much risk you accept, how it is split and which rules you follow. It also sets out when you look at it and what you do in a fall. Its purpose is modest but decisive. Everything you know about investing only helps if you still act on it in the middle of a crash, when fear is loudest. A plan written while you are calm is the tool that makes that possible.

Why an investment plan works better on paper

Decisions made in calm times tend to be better than decisions made in fear or excitement. When markets drop sharply, the urge to "do something" is strong. Headlines add pressure, and every option feels urgent.

A written plan changes the question. Instead of "What should I do now?", you ask: "Does my plan say to do this?" Most of the time, the answer is no. That turns a panic decision into a quick check.

Professional investors work under written mandates for exactly this reason. A private investor can use the same discipline, with nothing more than a sheet of paper.

The five sections of a one-page plan

The lesson structures the plan into five short sections. Each one answers a question you would otherwise face under stress.

1. Goals. What the money is for and when you need it. A house deposit in five years and retirement in thirty are different jobs. 2. Risk level. Defensive, Balanced or Growth, the reason you chose it, and the worst fall you are prepared to accept. It helps to choose this for the person you will be in a crisis, not the person you are on a good day. 3. Allocation. Your asset allocation: the split between a core and a satellite, and the building blocks in each. In the course's approach, the core is systematic and the satellite is a small, fixed share for your own ideas. 4. Rules. How you follow your signals, how you size positions, how and when you rebalance, and the limits you never break. 5. Routine. When you look at the portfolio, and what you do then.

Keeping it to one page is deliberate. A long document is rarely reread when it matters. One page can be read in two minutes, even on a bad day.

Section five: a routine that limits how often you look

The routine defines the rhythm of your investing life. The lesson's example sets aside one hour on the last trading day of each month. In that hour you:

• check your signals,
• carry out rebalancing if your rules call for it,
• write one line in your investment log.

Nothing happens in between, unless the plan itself says so. This matters because most damaging decisions are made between scheduled checks, after a scary headline or a sharp daily move. A fixed routine removes those moments from the decision process.

The crisis section most plans forget

Most plans describe the good times well and the bad times not at all. The lesson adds one more part: what you will do in a fall. The key is to write it now, while you are calm.

An example structure:

At −10%

• Nothing new. Check the plan.
• Read your own crisis notes.

A fall of this size is a correction, an ordinary part of investing. It does not call for new decisions.

At −20% and −30%

• Follow the signals, not the news.
• Rebalance only on schedule.
• Never abandon the core in a panic.

At these levels the fall counts as a crash, and the pressure to act is at its peak. Notes written in your own words carry more weight than any commentary you read that day. Your plan has already considered a drawdown of this size and decided how to respond.

Keep the plan alive: review once a year, not every month

A plan needs updating, but rarely. The lesson suggests a review once a year. Change it only when your life changes:

• your income,
• your goals,
• your family situation,
• your time horizon.

Never change it because the market moved last month. As the lesson puts it, a plan that changes with every headline is not a plan. It is a diary of your moods.

This also completes the logic of building a portfolio. Choose a risk level you will stick with, and use low-cost, broad building blocks. Put a systematic core at the centre and give your own ideas a small, fixed satellite. Keep costs and taxes low. Then write all of it on one page, so the plan decides, not your mood.

What to do with this

• Draft the five sections today: goals, risk level, allocation, rules and routine. Keep each to a few lines.
• Add crisis notes for −10%, −20% and −30%, written in your own words while markets are calm.
• Fix a routine date, for example the last trading day of each month, and note what you check and record in that slot.
• Sign and date the page, and store it where you will see it when markets get rough.
• Put one annual review in your calendar, and limit changes to changes in your life.

This article is based on Lesson 6.5 of our course Mastering Investments, where Module 1 is free.

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