Now that we are officially in a bear market the opportunity to make money comes distinctly on the downside with shorting or options. For average investors though that don't have margin accounts and can only trade long, sitting in 100% cash is arguably the best path to success.
Why? It is a fact that last month alone the NASDAQ was down 9.11%. So, I don't care how diversified your portfolio is, odds have it that last month you lost money. As a result, being a 22 year old who is obsessed with the market I have found some great ways to NOT get involved....
...Here are 12 of them...
- Delete the bookmark of your broker login page - For the lazy investor having to type in that whole url to login may make the difference in you not jumping at that "big news" you just read online (ie buying Apple because the new iphone is launching).
- Remove yourself from your computer screen - If you find yourself on the brink of buying some shares of financial stock simply stop, slowly move the mouse away, stand up, and proceed to walk around the office until the urge has surpassed.
- Research other topics besides stock picks - Perhaps take that hour a night you normally dedicate to stock research and spend half of it assessing the day's damage and the other half memorizing pi (hint: use a song).
- Exercise more - When the market gets frustrating just run on your treadmill if you have one or go to the gym. It clears your mind while burning some calories.
- Discuss how terrible the market currently is - Even with the market down 9% in one month you may still have an urging to get involved so talk to your buddies about how the market is so horrible and convince yourself to sit on the sidelines.
- Read - Just stay away from those articles, "50 stocks you must own NOW".
- Learn to cook - I have become quite the chef lately and it is amazing that I don't have to eat out every other night to keep my hunger at bay.
- Buy inverse ETFs - Yes you can short the market even though you don't have margin, and it is through purchasing inverse ETFs. But what fun are those when you are trying to stay 100% cash and watch the world crumble beneath itself?
- Download a lot of crappy old music and sing to your roommates - This game starts fun for you but ends horribly after you realize you aren't Seal. My roommate went as far as shutting the door then texting my girlfriend so she calls me later, "you were dancing and singing to what song?"
- Write about other topics besides stock picks - Notice how this blog has cut down on the number of stock pick posts... it really does keep your mind off hitting the "place order" button.
- Do a ton of research on historical market performance - I decided that I would create an excel sheet of the last 10 years analyzing the returns of the NASDAQ on a monthly, quarterly, and bi-quarterly basis. Did you know that during the back half of 1999 the NASDAQ run up a staggering 51.49%? Those were the days...
- Keep rambling to burn time - I started with 10 ways, then this post became 11 ways, and hell now I have 12. Life is good, "mmmm k?"