I was watching Mad Money with Jim Cramer today. He had a segment where he chose a diversified portfolio that emphasized yield. "Finally the market comes round to my way of thinking." I laughed. Suddenly lost in my early days of learning to trade stocks. Equally as suddenly, I remembered part of why it hadn't been a success only journey.
In those days, my attempts of at trying to manifest money had a distinct taste of desperation. For one thing, the notion of "manifesting" money hadn't been introduced to me yet. For another, I had recently gotten divorced and my ex-husband had left a deep impression in my mind of just what he thought my chances were at surviving if I continued to work part time.
The first stock I ever purchased was DIS (The Walt Disney Company.) I think I bought 10 shares at $28.10/share. If I had held onto that position and added to it, I would have made a tidy profit by now. DIS trades at about $90.14 today. When I bought Disney, though, it was a slow mover that hadn't moved much in ages. But, like any new investor, I checked the price once an hour. If Disney was any example, it was going to me take me forever just to earn as much money as I had saved in the first place. Let alone make my fortune.
At the same time, a customer and friend where I work who was a "Day Trader" introduced me to the notion of Master Limited Partnerships and Trusts. It turned out he "day traded" once in awhile. Most of the time he invested in high yield, slow moving names. It seemed like a good plan to me. After all, clearly I didn't make enough money. That was what my ex husband said. That was what society seemed to say too. At the same time, I liked my life. I liked where I worked. I didn't want to have to get a 9-to-5 cubicle to survive. Some of the MLPs and Trusts had 9% dividends or higher. I'd be guaranteed to make at least 9%, right? Not exactly.
Now this is a moment where you can observe a Law of Attraction principle at work. In the Law of Attraction, you manifest what you are thinking about into your life. So, if you "need" whatever you are looking for or are desperate about it, you will attract more NEED and more DESPERATION. So there I was, desperately trying to figure out a way to earn more money via the stock market. I hadn't learned enough about how the stock market works yet, but I was desperately trying to make things happen.
One of the things I hadn't learned yet is that, the higher the interest or dividend that an investment vehicle pays out, the riskier the investment. In terms of the MLPs and Trusts, that played out in a couple of different ways. First, I hadn't learned enough about buying low yet. Unlike momentum plays, these high dividend names didn't do a very high volume in trades. As a result there could be as little as a six dollar spread between the name's 52 week high and low. On some of them I had the misfortune to buy my shares at the high, watch them fall down to the low and, be left wondering how long it would take them to get back to that high again as I watched the price move by only pennies for weeks at a time. On others, I would hold the name, usually running at a slight deficit to whatever I had paid, only to discover that they weren't going to be able to issue a dividend this quarter. (Which didn't do anything towards getting the stock price back to whatever I had paid.)
Panic, desperation and need manifest panic, desperation and need.
Have you ever had a lifeguard have to jump into the water and save you?
I have.
Throwing desperation and need at any problem is exactly like that.
Each time your head bobs to the surface, you thrash about with more fear, desperation and need. But unless you know how to swim or how to extricate yourself from whatever jam you've gotten yourself into, your head will slip under the water once again. Unless we change something about the dynamic, it becomes easier and easier to panic ourselves after each failed attempt.
I suffered some losses while I was learning to trade stocks. It comes with the territory and most people I know say it is unavoidable. I can tell you this, though, whether or not you will survive as a stock trader or investor, has absolutely EVERYTHING to do with your attitude after those losses. If you can do the following things, you might just find you have a future in the stock market:
1. don't panic
2. remain calm
3. study and understand what happened with the stock and why you lost money
4. form a theory of behavior based on your observations of the market
5. keep a positive attitude
6. (if you can believe you have natural talents that are just getting better, it would be a good thing)
7. believe that you will manifest the money you want (but don't become attached to HOW you are going to do it - in other words don't decide one particular stock is going to be a winner, especially in the face of it losing)
8. Until you feel like a natural and have a successful history trading stocks, study the stock market (in some manner, with a book, on TV, practice trading) five days a week
9. Memorize ticker symbols and familiarize yourself with the current track record of tradeable names with which you personally do business
No comments:
Post a Comment