Controllables-First Investment Plan
Build a plan you can keep when markets move against you
- Difficulty
- Moderate
- Time to result
- ~ongoing to results
- Steps
- 6
- Confidence
- 95%
Start with goals and choose an asset allocation that remains tolerable even during a serious decline. Implement it with broad, low-cost index funds rather than relying on repeated stock selection or market timing. Protect the plan with emergency savings and suitable tax planning, then reduce how often you inspect the portfolio. Felix cites research suggesting frequent checking can make risk feel larger, leading people to take less risk and earn lower returns. When news becomes alarming, review whether your goals or capacity changed; do not assume the headline creates an actionable forecast. The framework cannot remove losses, and a stock-heavy allocation is not suitable for everyone. Its purpose is to make behavior, diversification, costs and resilience—not prediction—the center of the investment process.
Origin
Extracted from The Diary of a CEO
Core principles
- 01Market movements are not controllable
- 02Trying to outperform can worsen investor outcomes
- 03Asset allocation must survive bad markets and bad emotions
- 04Planning, costs, taxes and emergency savings are actionable
How to run it
- 1
Set the financial goal
Define the future spending or independence the portfolio is intended to fund. Separate long-term money from cash needed in the near term.
Pro tip Use a life-goal exercise before choosing investments.
Watch out A vague goal makes appropriate risk difficult to judge.
- 2
Choose survivable risk
Select an asset allocation consistent with your time horizon, financial capacity and emotional tolerance. Imagine a major decline before committing.
Pro tip The best theoretical allocation fails if you panic and sell.
Watch out Felix's personal comfort with 100% stocks is not a universal recommendation.
- 3
Implement broadly and cheaply
Use low-cost index funds to capture broad market returns and diversify globally where appropriate. Avoid unnecessary concentration and high recurring fees.
Watch out Diversification does not prevent market losses.
- 4
Protect the plan
Keep emergency liquidity and address relevant tax-planning opportunities so predictable needs do not force a sale at a bad time.
Watch out Tax rules differ by jurisdiction.
- 5
Reduce feedback noise
Check the portfolio infrequently and avoid trading in response to ordinary volatility or alarming headlines. Review the plan on a schedule or after genuine life changes.
Pro tip Make the desired behavior easier by removing unnecessary app prompts.
Watch out Do not ignore account security, fraud alerts or required administration.
- 6
Monitor controllables
Track saving, fees, diversification, taxes, emergency reserves and whether the plan still fits the goal. Accept that relative market performance cannot be controlled.
In the wild
A globally diversified investor sees alarming war headlines and a market decline. They confirm that their emergency fund, time horizon and goals are unchanged, so they retain the allocation instead of trying to predict the recovery.
→ The investor avoids converting temporary volatility into a permanent timing decision.
The host jokes that his fiancée checks an investment only after years because she forgets the password. Felix agrees that infrequent checking can support better long-term behavior, though account security still matters.
→ The anecdote illustrates the behavioral value of reducing portfolio monitoring.
Common mistakes
Copying someone else's risk level
An allocation must fit the investor's own horizon, capacity and likely behavior during losses.
Reacting to every crisis
Felix argues that a diversified long-term investor need not change the portfolio simply because the world feels turbulent.
Checking until risk feels intolerable
Frequent short-term feedback can magnify perceived volatility and prompt excessive caution or trading.
Is it for you?
Best for
Long-term investors who are tempted to react to headlines, monitor returns constantly or chase outperformance.
Not ideal for
Money needed soon or investors whose goals, risk capacity and legal context have not been assessed.
From the transcript
“you want to focus on the things that you can control”
“You can't control markets.”
“Having emergency savings, tax planning. Those are things that you can control.”
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