In investing, decisions are made based on belief — but that belief must be formed from solid principles
1. Clear investment principles
• Define goals (short-term, long-term).
• Determine risk tolerance.
• Understand what you are investing in and why.
2. Data and analysis
Belief must be based on:
• Fundamental analysis (revenue, profit, cash flow…)
• Technical analysis (trends, volume, price ranges...)
• Economic and industry context.
3. Risk management
Even when you believe in the decision, you still need:
• Cut losses at a predetermined level
• Take profits according to strategy
• Do not concentrate risk on a single asset
4. Discipline
If belief is not tied to discipline, it can easily become an illusion.