NEW YORK (Money Magazine) - So far, we've learned a little about how our brains are set up to respond to the world outside. Now let's think about how you can use these new insights into the brain to make yourself a better investor.

"You will be much more in control," says Antonio Damasio of the University of Iowa, "if you realize how much you are not in control." Damasio's point is both simple and profound: Since it's impossible to change how your brain works, you must learn to make the most of its strengths and limitations alike

Whenever possible, you need to develop automated, irreversible investing habits that are tailor-made for neutralizing your brain's worst liabilities while optimizing its greatest assets. Here's how neuroscience leads to a new science of investing.

Strap yourself in -- Because the amygdala is an almost irresistible force, you must reduce your exposure to images that can provoke panic. Turn away from stock tickers; turn off the televised images of closing bells and yelling traders. And promise aloud or in writing, before a friend or family member who can hold you to it, that you won't check the value of your accounts more than once a month. If you haven't already, sign yourself up to dollar-cost average through an automatic investment plan that will electronically purchase shares in a mutual fund every month. That way, your investing commitment can never flag, even when you are full of fear.

Stay in balance -- Geniuses like Warren Buffett can get away with putting all their money in a handful of holdings. The rest of us need to set limits on our prediction addiction. Give your broker a limit order that will automatically sell any stock that grows to more than 10% of your total. And if your long-term goal is to have, say, 75% of your assets in stocks, but they've shriveled to 49%, buy enough to get them back up to 75%. Make that kind of asset reallocation twice a year, every year -- no more, no less -- on equidistant, easily memorable dates like New Year's Eve and July 4.

Redouble your research -- If a stock or fund goes straight up, don't just enjoy the ride. The better an investment does for you, the more powerfully your brain will believe nothing can ever go wrong with it. Each time it rises, say, 50%, study it again more closely; ask what could go wrong; seek out negative opinions. The time to do the most homework is before bad news can catch your brain by surprise. There are no guarantees, but doing extra research just when things are going wellis the best way to prepare yourself in case something later goes wrong -- or seems to. You'll then have a better sense of whether it's a false alarm or a real one.

Use different wallets -- If you can't stop chasing "the next Microsoft," at least chase it with only part of your money. Just as prudent gamblers lock most of their cash in the hotel-room safe and go onto the casino floor with no more than they're willing to lose, you should set up a "mad money" account. You can't control your prediction addiction, but you can at least contain it -- by putting into your mad-money account only what you can afford to lose. That way, you speculate with a fraction of your money, not with all of it.

Build an emotional registry -- Remembering what you did is only one way to learn from your own experience. You also should remember how you felt after your decisions (and their results). "Regularly evaluating whether an outcome made you feel good or bad," says University of Iowa's Antoine Bechara, "will help you learn from your behavior." Keeping a written record of your feelings -- what Bechara calls an emotional registry -- is a good idea, particularly if you are a younger investor. Store these "feeling records" alongside your trading records.

Look at the long run -- Remember that your brain perceives anything that repeats a couple of times as a trend -- so never buy a stock or a fund because its short-term returns look hot. Check out the long run, and never assess performance in isolation; always compare a stock or fund to other similar choices.

Flex your current -- Because your prefrontal cortex is responsible for evaluating the consequences of your actions, and because advancing age impairs that part of your brain, be on guard. If you (or members of your family) are elderly, simple reminders can help -- like a note next to the phone that says, "No thanks to telemarketers" or a Post-It note on your PC that reads, "Never open unsolicited investing e-mail."

Diversify, diversify, diversify -- This grim bear market has revealed the biggest risk of all: underestimating your own tolerance for risk. Thinking you can tough it out then suddenly finding you can't is a recipe for financial disaster. Diversification -- making sure that you never keep all your money in one kind of investment -- is the single most powerful way to prevent your brain from working against you. By always holding some cash, some bonds, some real estate, some U.S. and foreign stocks, you ensure that your prediction addiction can never force you into a single, sweeping bet on a "trend" that disappears. And by keeping your money in a broad basket of assets, you lower the odds that a meltdown in one investment will send your amygdala into overdrive.

Putting yourself on investing autopilot minimizes the opportunities for your brain to perceive trends that aren't there, to overreact when apparent trends turn out to be illusions or to panic when fear is in the air. That frees up your brain to focus on the harder work of long-term financial planning. Above all, you should take enormous comfort from knowing that the latest scientific findings show just how newly valid the oldest truths of investing really are.