How to deal with investing storms

Discussion in 'Psychology' started by hellotr1, Apr 3, 2006.

  1. hellotr1


    article from

    Playing on a quote from Thomas Moore:

    “The life of an investor is full of major and minor crises – the ups and downs of the market, success and failure in trades, capital and time – and all kinds of distractions. It is tied to stocks and events and history. With all of these felt details, investing etches itself into memory and personality. It’s difficult to imagine anything more nourishing to the portfolio.”

    Wow, who knew investing could be so poetic. While my twist on this classic is meant to be somewhat playful, I have buried some investing wisdom inside its verses. Check out that first line - an investor’s life is FULL of major and minor crises. It doesn’t say a crisis here or there, it’s saying that investing is full of capital killers. The market moves unexpectedly, you’re caught in the wrong direction, or you’re too busy with other things to research that stock you heard about. All this tension might be great for serving up a good “poem”, but it’s not so great when you are trading your way through one.

    So how does this information help us to become better investors? Just like our other experiences in life, those investing storms will have an impact on your investing decisions going forward. Smart investors will apply the experiences to form better disciplines and management. Smart investors will learn from their ups and downs in trading so that their portfolio will survive and grow stronger. Notice I only mention “smart” investors because a not-so-smart investor won’t be an investor for long.

    Put your experiences to use by reviewing your trading diary often and always be honest with yourself about your performance. Seek out help in the areas you are weak and never stop learning.