Why do we need checklists? Checklists save us from the natural human tendency to take shortcuts and arrive at decisions as quickly as possible. Pilots flying planes, doctors performing surgeries, bankers offering a loan, and even a kid’s admission process at a school, checklists are used everywhere. In fact, we are surrounded by checklists if you think about it. Checklists are used so widely because they are very effective when designed well.

Start with any basic investment checklist and modify it to suit your needs and style. A quick google search should be enough to find checklists that many great investors have used. You can start with the investment checklist of your favorite investor and over time modify it to suit your need and investment style. If you look at “Warren Buffet’s Checklist”, “Peter Lynch’s Checklist” or “Philip Fisher’s Checklist”, you will realize that they are all different and yet they all have done well as investors. So it is important to understand that no one checklist is the holy grail of investing. Everyone has their own individual investing style that suits & works for them. Understand your style, develop your checklist accordingly, and follow it.

There are two approaches to creating your own checklist:

1. Start with one simple checklist of an investor that you admire and over time make necessary changes to it to suit your style of investing.
2. Start by combining multiple checklists and over time keep removing items that you deem less important and eventually you will arrive at a short enough checklist that you can follow.

It is important to understand that even while following a checklist; the risk of losing capital remains. But if your checklist is designed well, it will reduce your risk of making mistakes. Remember, you don’t have to be right every time, no one ever is. You just have to be right more often than not and you are likely to do well as an investor.

Below is a nice graphic version of the above information.