I lost 8k USD in 2 days 😱
I use Google insights public tools for my work every day, and I am still amazed by the things you can discover with it.
For example, people seem to be more worried about losing money in the stock market than in gambling, according to Google's popular searches feature, while a few bunches seem to be worried about losing money in their dreams 😴.
I "may" be a compulsive gambler
Actually, investing in the stock market can feel a lot like gambling for some people, and I like to think it does for most people (it makes me feel more normal). When I was 20 years old, I remember going to the casino for the first time, to realize I was prone to the "compulsive gambling" pathology. I went there with an actual plan and conviction: gambling on one color at the "roulette", and doubling my bet every time until I win. Yes, sure I knew about the "green zero", which makes probabilities work against such a plan, but having just a little luck was also part of the plan. What I did not plan is the minimum 50 USD bet the casino required to play. My plan was foolish in the first place, now it was dumb as I only had 100 USD. I decided to play anyway and lost my 100 USD in about 5 min, with a "green zero" coming out once. I remember how I felt the adrenaline shooting through my veins, and my judgment vanishing altogether. The only brilliant part of the plan is that I did not bring my debit card so as not to lose more money than the cash I had on hand. I turned to my friend and said "I need your debit card, please!", luckily for me, my friend did not give me his card, end of the story.
That was important 100 USD learning I try to apply when investing. You need a plan, you need to stick to it unless you realize your plan sucks. Never improvise, and recognize when you are getting too emotional, exactly the opposite of what I did back in that casino.
Investing is not an event, it's a mindset
Maybe you felt some of that adrenaline rush if you were actively invested in the stock market back in the March crash, I did. But the more it happens, the less I feel this rush. Last week, for example, the tech sector had a major correction, with the Nasdaq plunging +5% in two days between Sept 2nd and 4th. I "lost" about 8k in that correction, but was makes me feel I am heading in the right direction in my investing journey is that I did not feel (almost) anything. Actually, I should not even know that I "lost" 8k. I would not know if I did not check my broker account every day. This is some of my "compulsive gambling" behavior checking in... If you think like an investor, not a trader, you should NOT check your broker account every day. You should rather stick to a regular schedule to keep the big picture in mind, not the day-to-day swings of the capricious market (that market correction had no clearly identified reasons). What is important is to keep looking at the bigger picture, at how you are doing compared to your plan.
Don´t read too many financial headlines
Get used to "lose" what seems to be a big sum of money in a short period of time, or don´t check your broker account more than a couple of times during the year, both are sound strategies to set an investor mindset. Else, you are a trader, or a speculator, which is fine if you can live with it, I can´t: I would get too much kick out of it and would probably lose myself to my compulsive gambling nature. Learning not to feel makes it also a lot easier to read through the financial headlines without going insanely worried, which is bad for my liver.
Next step setting an investor mindset.
I will keep you posted on my progress setting an investor mindset. To start with I am developing a tool that should help me resist my urge to look at my portfolio every day, so make sure you subscribe to my newsletter to get more details about this if you are interested.
If you want to see my live portfolio, see my stats, or even copy my trades, you will need an account with eToro, which is the broker I use. In case you do open an account with eToro, use this referral link, let me know and you win 100 USD cash. If you have an account, you can look for me by my username "Nrikike".
Happy investing!