Research
A strategy is a set of rules, not a promise of a result
An approach becomes a strategy when the decisions are written in advance. The objective, the universe, the entry or allocation rule, the exit or review rule, the size, the costs and the failure condition are the document. A rising line drawn afterwards is a different object.
Key points
- Write the rule before looking at the latest winner.
- Costs, size and the condition that retires the rule belong in the same document as the entry.
- A completed worksheet is a record of what you wrote. It is not evidence the rule will make money.
What is going on
Investor education from the SEC’s Investor.gov describes diversification, costs and the difference between a plan and a prediction. Those materials do not supply a house ranking of strategies, and this desk does not add one. A buy-and-hold schedule, a rebalance band, a trend filter and a hedge are all rules about exposure. They answer different questions.
Why it matters
Without a written objective it is easy to praise a rule after a path that suited it and discard the same rule after a path that did not. The objective decides which disappointment counts as the rule working. A contribution plan that loses money for a year can still have been followed. A hedge that loses money while the exposure also loses money has not done the job that was written down, if the job was to offset that exposure.
What to watch
Name the universe, the instrument, the size, the cost you are willing to assume, and the review date. Name the observation that would make you stop. If a cell is blank, leave it blank. The calculators on this site take numbers you type. They do not look up a historical result for the rule.
Risks
A clear rule can still lose money, and a clear rule can still be a poor match for the account that has to fund it. Writing the rule does not create a probability. This note does not rank approaches and it does not show a fitted performance line.
What the document is for
The point of the rulebook is review. On the review date you can ask whether the rule was followed, what it cost, and whether the failure condition has arrived. You cannot ask a blank page why the account moved. A strategy comparison on this hub describes structure. It does not award a score.
Related
Sources and review
Written by: WiT Markets Editorial. Writes and structures WiT Markets pages. Separates a sourced fact from a cell that is Not confirmed.
Review: Editorially reviewed. This is not a qualified specialist review and it is not a legal sign-off.
Last reviewed: . Next review due . The date is an editorial pass. It is not a live check of every third-party fee.
Regulatory and official sources
- Investor.gov — checked 13 October 2026
Other sources
- WiT Markets methodology — checked 13 October 2026
Methodology. Editorial policy. Corrections. Report an error.