Hey Guys,
The market is roughly in the same spot as it was yesterday when I emailed (the S&P 500 is around 4130), but overall there are signs of turbulence.
One of those signs is in my trading account, where more positions hit stoplosses. From the middle of July to the middle of August, just about anyone who bought a market pullback was rewarded with profit. And then the market abruptly changed gears over the last week, and it triggered a string of losses. You can just never tell for sure what's coming next.
At times like this when there is a lot of red in my account, sometimes tough emotions come up. Feelings of frustration and fear might come up for many people, including me sometimes.
What I like to do when that happens is peel back the layers to figure out why I feel frustrated or fearful. And what I've found, at least in my personal case, is that there is some part of me that sometimes thinks my self worth is tied to money.
I've studied this part of myself a lot, and for me that belief originated when I was a kid. I wrote an article about it here. When I was young, I somehow got it in my head that if I didn't perform well, I might not be lovable. And for someone who thinks like that, money can be a handy way to gauge performance. So when I go through a drawdown, sometimes it feels like my self worth is at stake.
In reality, each of us has value that goes far beyond money. To think that my self worth is tied to how much money I have is, to my mind, total nonsense. As an adult I can see it clearly, but those ancient thought patterns from when I was a kid still can trigger emotions in me. And that's why at a time of drawdown, I like to step back and explore the feeling and figure out what the deeper cause is, and see if it's even valid or not.
I'm not saying that money doesn't matter. We're all here to make money. It serves a purpose. But for me, that purpose is not to define my self worth. And acknowledging that helps to lessen the intensity of emotions that come up during trading.
Today I picked up another full slate of positions. In the main account, I bought stock for AIG and EIX. In the extra options account I bought options for AIG and AAPL. In the low-priced account I bought positions for DELL and LSXMA.
If you have any questions or feedback, I'd love to hear from you.