Dave, your last blog really resonated with me. What has struck me over the years is how frequently the term “unprecedented” comes up when people are talking about the market or the economy as a whole.

There’s always something new going on that no one fully understands. Certain things do remain constant, such as the boom-and-bust cycle around hot areas of the market—remember when people speculated that we might be in some sort of eternal bull market back when the Dow was around 12,000? But the economy is constantly evolving—and it doesn’t have any rules that it’s required to follow. For example, there’s no reason stocks must always outperform bonds over the long run, as you point out in “Past Is No Prologue.”

However, ironically, it seems the best way the average investor should deal with the flux that governs the economy is to develop a set of rules that they adhere to religiously. Nihilism can be particularly disastrous to the retirement investor. (Although that would probably be a great book title to market to the hipster crowd: “The Nihilist’s Guide To Investing.”) I don’t think it even really matters what the rules are exactly, as long as they relate to sound principles.

And they can be really basic—things like:

• Diversify your investments
• Don’t put your money in investment vehicles you don’t understand
• Set your schedule or your triggers in advance for rebalancing
• Know what your goals are

And so on … just as long as you’re operating in some kind of structure. If that were the norm for the average investor, there probably wouldn’t be so many regulatory agencies freaking out about leveraged and inverse ETFs.

By following self-imposed rules, the individual investor isn’t going to change how the market works, but they will be ensuring that they respond to all those “unprecedented” scenarios in a disciplined way. The markets might be efficient, but they’re also pretty chaotic. Having your own set of customized rules is the way to bring order to that chaos.