Monday, July 17th, 2006
10 ways to handle tough markets, part 2
Last week we gave the first 5 tips on how to handle tough markets. Here’s the final five:
6. Work on your fitness
This follows on from increasing your resilience and toughness. It’s well known that exercising increases the flow of endorphins, which research has shown can improve your mood. Exercising should alleviate some of your ‘down’ feeling. You don’t have to over-do it. Just 20 to 30 minutes of walking each day is enough.
7. Tighten up your personal spending
If you’re watching your stocks fall, you’ll feel worse if your personal finances are in disarray. It will particularly hurt if you’re relying on investment profits to buy a new car or take the family on a holiday. But if you’re sticking to a spending budget, have little or no credit card debt, and cash set aside for rainy days, the stress will be less. That’s because it cuts the link between your immediate financial well-being and the performance of your account. This reduces pressure and allows you to make investment decisions with a clear head.
8. Do some Yoga
Simple Yoga techniques will help you relax and remove any muscle tension. One effective book is Back Care Basics: A Doctor’s Gentle Yoga Program for Back and Neck Pain Relief, which helps iron out kinks and stress related pain. It works wonders.
9. Re-read Mark Douglas’s Trading in the Zone
There’s nothing like losing money to throw an investor off track. But 
Trading in the Zone, the best book on investing psychology, will help you stick to your strategy and plan. It reminds you that even when you have an edge,
losses are a normal part of trading. What’s important is to take a long-term view by sticking to your system even in tough times.
10. Play the Whipsaw Song to your partner
Play Ed Seykota’s Whipsaw Song to your loved one! It’s not Mozart but it will put trading in perspective by putting a smile on your face. It will also create a sense of camaraderie with those you share it with.
Do you have any techniques to handle tough markets? Leave a comment below
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