প্রথম পর্যালোচনা Your first review

This is the last lesson of stage three, and it is about a habit that puts everything else to work. Once a year, on a fixed day, you sit down and look at the whole plan.

That single day is what turns a reader into an investor, because it is where your written arguments meet reality.

When, and why a fixed day

Pick a date and keep it the same every year. A few months after most annual reports are published gives you the most information to work with.

Why fixed? Because "when I get time" turns out to mean when the market is bad, and then the review becomes a reaction to fear. A date in the calendar forces the thinking to happen while you are calm.

The six tasks

The order is deliberate: theses first, weights next, and performance last. Starting from performance turns every other task into an explanation of it, which is the looking-for-agreement trap.

Task one: test the theses

Open each holding's thesis and read only the risks. Beside each risk write: happened, did not happen, or on its way.

If one happened, the decision has already been made and your job is to carry it out. Sitting down to find reasons at this moment is exactly what the thesis was written to prevent.

Task two: the ones with no thesis

Nearly every review turns up a holding or two whose thesis was never written, or was written and no longer means anything.

A simple rule for these: either write a thesis today, or sell. A position for which no reason can be written down on today's date is a habit rather than an investment.

Tasks three and four: weights and costs

The weights table is in the previous lesson. What to look at: whether any position or sector is past its limit, and whether new money can correct it.

The cost calculation is uncomfortable and necessary. Add the commissions from last year's contract notes and divide by the value of the portfolio. If the number is above 1%, ask why there was so much trading.

Task five: performance, and the right comparison

Now performance. A number alone means nothing, so it needs comparisons. Three are useful: the index, a fixed deposit, and inflation.

The last is the most important. If your return is below inflation then your purchasing power fell even though the number rose, and purchasing power is the real accounting.

Task six: next year's decision

Three lines, all of them specific. How much a month I will put in this year. Which sector I will add weight to. And one thing I will do better, such as reading every quarterly result, or waiting seven days before any sale.

Write the three lines, date them, and make reading them the first task of next year's review.

This stage ends here

What you have learnt across stages zero to three is a complete method: getting the money side in order, the market's vocabulary, why markets move, and checking a company for yourself. What comes after builds on this foundation, and the foundation is what stays useful longest.

One last thing, which is the summary of this whole school: what puts you ahead in investing is not intelligence but patience and written rules. Intelligent people are plentiful; people who follow their own written rules for ten years are not.