Mental Calisthenics for Better Stock Investing – Tuesday Treadmill
Source: http://Blog.QualityStocks.net/?p=11433Posted on Tuesday, July 29th, 2008 | In Market Commentary, OTCBB Markets, Small & Micro Cap, Stocks to Watch
The brain needs regular exercise as much as our muscles. Emotions, like fat, have their places, but excessive amounts are unattractive and harmful. Humans, rather than robots, have to make decisions to buy and sell stocks. How can you keep feelings in check?
Try to act neutral in the faces of losses and gains. Shun exuberance when a stock market index rises unexpectedly. Do not allow nervousness to cloud your mind when the stock exchange checks in with bad news day-after-day. Beware of media deadweight that flutters around to stay afloat in your mind.
Practice looking ahead. Think of the next step in a sequence of causes and effects. Search for primary and factual information that can help you estimate where each of your stocks is headed.
Look beyond the obvious. Do not accept packaged opinions or forecasts. Be as skeptical as a great gym coach. Use questions to dig for real roots. Remain alert at all times for evasive and incomplete answers.
A philosophy of custody will give your ruthlessness a veneer of humility. Question your financial planning associates with courtesy but without mercy. Let your heart rule your head in love, but not your stock trades.
A makeover takes time. Practice mental calisthenics for a few minutes before each trading bell, so that it does not toll at the cost of your net worth. Wind down at the end of great trading sessions without blowing away your gains.
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