Fiscal Investor
Rules to Investing
These are not trading rules. They are survival rules. Built from market history, cycle awareness, and the belief that avoiding permanent loss matters more than chasing every upside.
1. Risk Comes First. Returns Come Second.
- The market will always offer upside — capital does not always survive mistakes.
- Your job is not to maximize returns, but to avoid catastrophic drawdowns.
- Survival is the only non-negotiable rule.
“You don’t need to hit home runs. You need to stay in the game.”
2. Markets Are Cyclical, Not Linear
- Economic cycles, credit cycles, and sentiment cycles repeat.
- Extreme optimism and extreme pessimism both create risk.
- What feels permanent rarely is.
When people say “this time is different,” risk is usually rising — not falling.
3. Liquidity Is a Position
- Cash is not a failure — it is optionality.
- Liquidity allows you to act when others are forced sellers.
- Dry powder matters most when fear replaces confidence.
4. Valuation Always Matters — Eventually
- Valuations may not matter today, this quarter, or this year.
- They always matter over a full cycle.
- Paying too much compresses future returns, even for great companies.
“You can overpay for growth — but time always sends the bill.”
5. Diversification Is Defense, Not Dilution
- Diversification exists to protect you from being wrong.
- No single forecast deserves your entire portfolio.
- Correlation rises when stress shows up — plan accordingly.
6. Earnings and Cash Flow Pay the Bills
- Narratives are temporary; cash flow is durable.
- Over time, prices follow earnings.
- Balance sheets matter most when conditions tighten.
7. Volatility Is the Price of Admission
- If volatility scares you out, risk was mis-sized.
- Short-term price movement is not risk — forced selling is.
- Position sizing matters more than predictions.
If you can’t hold it during drawdowns, you shouldn’t own it.
8. Discipline Beats Intelligence
- Most mistakes are behavioral, not analytical.
- Rules matter most when emotions are loud.
- Consistency compounds — impulsiveness destroys.
9. Avoid the Extremes
- Markets rarely break from the middle — they break from extremes.
- Watch leverage, speculation, and concentration.
- Excess builds quietly and unwinds violently.
10. The Goal Is a Good Financial Life
- Markets exist to serve your life — not dominate it.
- Match risk to time horizon and real-world needs.
- Peace of mind is an underrated return.
Fiscal Investor Bottom Line
Investing is not about being right every day. It is about staying solvent, staying disciplined, and staying humble long enough for compounding to work.
“When you’re one step ahead of the crowd, you’re a genius.
Two steps ahead, you’re a crackpot — until time proves otherwise.”
These rules are meant to be revisited — especially when markets feel easy.