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Creative Responsibility

“What good can come from comfort? It’s not going to be art. I think there’s a false ideal out there, to some people — maybe younger people — they might think “I could be an artist and I don’t have to work.”

“But I think calling yourself an artist, you have to work three times as hard as someone with a punch-clock job. Because if you punch in, you have a responsibility at your job, but you can also do what you’re told, and work the machine, whatever you’re doing, do whatever is already there for you… do what’s expected of you of that job.

“But if you are an artist and you have to create something from nothing — there is nothing on this canvas, nothing on this tape, we have to create something that didn’t exist before — that’s ultra-responsibility, super-responsibility isn’t it.”

– Jack White (via Conan O’ Brien)

Traders and investors bear a “creative responsibility” in respect to creating something from nothing… starting with a blank canvas (portfolio) and producing profitable and worthwhile results over time.

This notion reflects the craftsmanship embedded in the investment process… trade selection… methodology and process design…

As an active market participant, do you see yourself as an artist too? How do you embrace the creative responsibility that comes with such?

Traders Psychological TEST

Paul Farrell observes that 95% of traders don’t make it. 80% of all day traders lose money. One study found active investors turn over their portfolios excessively (258% annually) but made less than 12% on their money. Passive buy-and-hold investors with only 2% portfolio turnover had significantly better returns.

And, most day traders suffer negative health consequences from their hyper active market moves.

To find out what your trading instincts mean — to grade your own Traders Psychological Profile — answer the following questions Yes or N:

Traders Psychological Profile
Y N You’ve tried more than one new investment strategy this year
Y N Feel you’re buying and selling funds at the wrong time
Y N Rarely open up to anybody for feedback about your losses
Y N Subscribe to two or more newsletters, feel overwhelmed
Y N Can count on one hand all the good laughs this week
Y N Have a lingering resentment about someone or something
Y N You love cable news, but need more time to trade
Y N Rarely break a sweat when exercising the past few weeks
Y N Wonder whether you bet too much on recent investments
Y N Need more than three caffeine and alcohol drinks a day
Y N Feel “something” keeps you from making more money
Y N Frequently don’t trust your instincts or your strategy
Y N You’ve had a major family or personal loss recently
Y N Believe losses are caused by the market manipulators
Y N You’re overweight and snack often on comfort food
Y N Fear your future trades may fail due to a losing streak
Y N Diet and sleep are disturbed by worries about money
Y N Your retirement portfolio’s not growing fast enough
Y N No vacation in a year, and lack an active social life
Y N Nothing (or everything) interferes with making money

 

Add up the number of Yes answers. Farrell notes that if your total number of “yes” answers is six or more, then day trading is too stressful and risky for you.

The alternative to active trading is intelligent asset allocation. At the very least, he advises that you segregate your “untouchable” retirement money . . .

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