First and foremost, a message to my readership: I hope you are staying safe and healthy during these difficult and unsettling times.
COVID-19 is wreaking havoc on our lives, our families, our jobs and the markets. I ask you all to be mindful of the older generation amongst us — those who are fragile in health and cloistered in less than ideal situations. We're all anxious for quarantines to be lifted, restaurants to reopen and normal life to return. But that day seems long in coming right now. We have no choice but to move forward in spite of the chaos that surrounds us all.
Perhaps 2020 will be remembered as the year of the great American Investor Quarantine. Having said that, I think it's important for us to distinguish between cloistered versus quarantined. To a large degree, how you choose to look at yourself right now is a matter of personal outlook and choice. It's a good time to remember the old adage of making lemonade out of lemons.
My best advice right now is to stay put. Chill out. Be positive. Be productive. Learn a new hobby. Grow a beard (well okay, not you ladies). This contagion and the resulting crisis will indeed pass. In the meantime, you need to adapt to the new reality.
Here are my 10 steps to surviving this current version of a "zombie apocalypse" — my suggestions for maintaining your psychological, physical and financial well-being until a healthy planet Earth returns. Hopefully, it means investing one dollar now and getting ten back later.
Social isolation can be unhealthy, but we're all fortunate to have an authentic spirit of camaraderie within our investment community. Reach out to your friends and investment acquaintances. Pick up the phone. Email and FaceTime with others. Have a video conference on Zoom. Start an online investment group to discuss the markets and give your group an appropriate name like "Socially Distanced Investors". And keep washing those hands for at least 20 seconds!
Now would be a great time to revisit the boundaries you have set for balancing your home life with work life and investor life. Don't let yourself shift disproportionately over to work life. Keep a healthy outlook and balance in all aspects of your day-to-day being.
Do something nice for yourself at the end of each day. I just went to a seminar by an emergency room doctor who presented both medical and academic studies that prove definitively that meditation once a day makes your brain work better as well as increasing your longevity. The statistics he presented are very convincing.
Take this time to read a good investment book. Here are a few suggestions.
These are trying times indeed. The present realities demand that prudent individuals revisit, re-evaluate and possibly adjust their personal household budgets. Minimizing your debt and reviewing your emergency savings would be at the top of my list.
During stressful times, I've found that dissecting my asset allocation buckets with a fine-toothed comb makes me queasy, but a stress test during bull markets is a somewhat artificial fairytale endeavor. Your portfolio's strengths and weaknesses are now laid bare. As Warren Buffett says, Personally, I find Morningstar's X-Ray tool a perfect companion in this exercise.
Re-read your personal trader's journal. Have you been keeping one? If not, no worries. You can always read through the archives of our Traders Journal Blog here on StockCharts. Spending some time with your "Investor Self" during bear markets provides useful insights to learn new ways of moving forward.
Have some fun! Explore tools and resources on StockCharts.com that you may have overlooked or forgotten about. Here are some I suggest among many others:
- Symbol Summary
- Predefined Scans
- ChartStyles and Style Buttons
- Seasonality Charts
- Historical Chart Gallery
Good routines increase the probability of profits. Great routines print profits. Your ChartLists are the foundation of your routines. They have an immense impact on six of the ten stages in our Tensile Trading book. Now is a perfect time to review all your ChartLists to consider how you structure them, how you populated them and how you use them. Here are my own ChartLists all pre-populated.
How did your buying methodology and sell disciplines hold up to this unprecedented "stress test"? Can you be brutally honest with yourself about the bull market ride and the bucking bronco they're now calling a bear market? Remember what Darwin discovered. It wasn't the strongest or the smartest of a species that survived. It was those that adapted and changed that survived and prospered.
In closing, I hope you'll remain positive in these tension-filled times. A few "don't dos" may be worth repeating. Don't forget to eat healthy, exercise and keep your immune system firing on all cylinders. Don't buy into the predictions of a global meltdown and extinction event. Don't let the doomsaying mess with your psyche. And finally, don't be short-tempered with your pets or your significant others. We're all in this together!
The bottom line? This danger, like so many before, will come to pass in the end. We'll grieve our losses, dream of new beginnings, and learn new ways to live our lives and heal our Earth. Optimists are the ones who always prosper.
Trade well; trade with discipline!
- Gatis Roze, MBA, CMT
- Author, "Tensile Trading: The 10 Essential Stages of Stock Market Mastery" (Wiley, 2016)
- Presenter of the best-selling "Tensile Trading" DVD seminar
- Presenter of the "How to Master Your Asset Allocation Profile DVD" seminar
- Developer of the Tensile Trading ChartPack for StockCharts members