In his latest Washington Post column, top strategist Barry Ritholtz lays out some of the most important “rules of investing” that he has learned over the years.

Among the key tenets Ritholtz lays out:

Cut your losers short and let your winners run: Ritholtz calls this “perhaps the best investing advice ever”. He says letting winners run “allows compounding to occur, gives you the benefit of time and keeps your transaction costs, fees and taxes low”, while cutting your losers short “forces you to be humble and intelligent. It rotates you away from the sectors and stocks that are not working. Best of all, you are forced to admit your own fallibility — crucial for all investors.”

Asset allocation is crucial: Ritholtz says investors’ weighting of stocks, bonds, real estate and commodities within their portfolio is an issue that gets little attention in popular finance media. “Yet all of the academic studies show that it’s the most important decision an investor makes,” he says. “It’s far more important than stock selection, yet that’s all anyone seems to want to talk about.”

Think like a contrarian: “The crowd can be fickle, overly emotional or even irrational,” Ritholtz says. “The contrarian learns to recognize when the crowd turns into an unruly mob. When that happens, it’s time to stop betting with the group, and take the other side of the trade — betting against the crowd.”