This morning, like every morning, I ate breakfast with my 3 1/2 year old son. He’s at the stage where he has to win at everything, including the first to finish breakfast. Of course, being 33 years older I eat faster, but I’ve learned to let him win to avoid a fit. I give him his breakfast first and catch up on any articles I might have missed in Barron’s or Smart Money while I eat. He concentrates on his breakfast.
Everything was rolling smoothly this morning until he gulped down his last bite, looked at me and said “I Win” and then reached for his milk. In all of the excitement of winning the one person eating contest he didn’t pay attention to exactly where his cup was and knocked it over. The crying started immediately. I jumped up and started cleaning the table and explained (seriously) that you don’t cry over spilled milk. I had to laugh when I heard myself say it. I told him that everyone makes mistakes and all we had to do was wipe up the table and all would be OK. He didn’t actually care about the table though. He wanted his milk back in the cup because he was still thirsty. I gave him more and all was better.
He reacted the way I’ve wanted to on some days when the markets move against me and I loose chunks of cash. I don’t really care that the markets fell, I just want my money back. If only I could go to the fridge and pour a new cup of a couple of thousand dollars whenever I wanted life would be easier. Instead I have to keep in mind that some days, weeks and months (if not years) I will incur losses. There’s not much I can do afterwards aside from trying to learn what I did wrong to end up there and try not to repeat it. I asked my son why he thought he knocked his milk over. He said he wasn’t being careful. That’s about as exact of an answer as you can get from a three year old and it applies to the market just as exactly.
Luckily I didn’t pour a full cup of milk for him, but only about half, in part because I know that he spills it sometimes. That’s the same approach I take with my investments. I don’t run close to my margin requirements because I know there will be bad times mixed in with the good.
The headlines at the end of the day yesterday said the Dow is at a four month low and the S&P500 is below where it started the year. That can’t be such a big worry after the longer than normal run up we’ve had. Corrections are a fact of the markets. I took a look at my returns over the last few month, not counting yesterday’s trades which I haven’t downloaded to Quicken yet. I’m still up good for the year, kicking the S&P’s ass. I’m even up for the quarter and only have to go back one month to see my account balance at the same level. I think after I download yesterday’s action and what appears to be another shit-storm today I might have to go back two months to see a leveling of my balance. This is important for me to look at to avoid regret of managing my own money versus investing in index funds. I still beat the market and if my account is still worth more now than two months ago or even four months ago then I’m on the right track.
Keep perspective. This is only money and if you are managing it correctly there’s plenty of time to find more to put back in your account. Strangley, I’m excited about this fall in that I know it will stop one day and I plan to be positioned to take advantage of the ride back up.
Technorati Tags: perspective, investing, stocks, trading
Good story. I like what the Fed did today, but some part of me doesn’t “trust” the situation. If all of the 100,200, and 300 point swings are here to stay then fine, but it’s almost like we are sort of getting jerked around. 14,000 to 12,500 in weeks then bullishness again. I don’t know. Hope i come up with the right stocks and options in this big mess. But I’m not crying over spilt milk! And thanks for your latest positions updates, i will follow those a bit…
Thanks! You’ll figure out what works for you coming up. Just think before you make the trade if the downside risk is worth it or not.