Sleep Easy Stocks (Part 1)

In May of last year, I saw a comment on a trading forum that truly resonated with me:

     > If a successful hedge fund manager is anxious about
     > the market, perhaps he should just take some valium.
     > Any investor in something as unpredictable as the
     > stock market who isn’t anxious–all the time–is not
     > in touch with reality. Whether the market is up,
     > down, or sideways, anxiety should be the baseline
     > emotion. Anyone who thinks he has a “sleep well at
     > night portfolio” is an idiot in denial.

In my opinion, plenty of reasons may be had to be bullish or bearish at any moment on the right edge of a chart. Optimists and pessimists always exist in the marketplace and the financial media’s whole business is to come up with both sets of arguments in order to capture as large an audience as possible.

In retrospect, it’s easy to look at a chart and say “it was easy to trade back here as the market was trending smoothly.” Investors and traders seem to do this all the time.

Now into my ninth year of full-time trading, I have not found these stories about easy money and stress-free trading to be reality. Rather, I consider it the stink of marketing and advertising. I’m not on edge during the days and experiencing cold sweats at nights but you also will not hear me bragging about profits. No matter what I’ve made in the past, I can easily lose everything when I encounter the next vicious market environment. This is reason enough to always keep one’s head on a swivel and to never think a portfolio without risk is a reasonable expectation.

If you disagree with the latter point then please consult Ronda Rousey. I would be very interested to hear what she thinks.