Summary: Cornerstone habits tend to make the other pieces of life click into place
Gauging your status before trading
Before making any trade on the financial markets each day, I’m sure you calculate your T-score*, i.e., subjectively measuring your cognitive and physical status to get a feeling for how balanced and reliable you are. The T-score can be put together in a multitude of ways and works best if it’s individually tailored. However, the following factors are probably relevant for most investors:
(* actually, I’m quite sure you don’t, but perhaps you should start)
- How much have you slept, how tired are you?
- What’s your current relationship status, are you arguing with each other? Are you feeling lonely?
- How’s your economy, how’s your trading been lately? Are you worried about paying your bills? Do you have a losing trade on that’s eating at you?
- Are you hungover?
- Are you rushed, did you have to cut your routines short this morning?
Making a quick check on your T-score every morning could do wonders for your investment performance, using it to make sure you don’t trade at all (or size your trades responsibly) if you’re emotional, tired, stressed or unbalanced in some way.
Remember that the most important thing for great long term investment performance is minimizing your number and size of mistakes. Going over your T-score every morning could in addition have positive knock-on effects on your investments and life in general.
The very act could wake you up, make you more alert and aware, perhaps cause you to do other positive things such as going for a morning walk.
Read on for more on such cornerstone habits.
I build my days around dog walks and workouts. I take my dog out 3-4 times a day, either taking a walk or throwing balls for about an hour.
My sleep, food, meditation and mobility work follow from that. I get tired around 11 pm and typically fall asleep around midnight. I get up when I’m done sleeping, never using an alarm. I tend to wake up at 7 in the summer and 8 during winter. I rise, go out for a walk, then have breakfast including the day’s single cup of coffee.
Further, exercise (and mobility work) makes me sleep better, which quickens my recovery and increases the quality of my workouts. Both make me naturally crave better food and so on and on in a synergistic cycle. During my walks and workouts I listen to podcasts on science, exercise and finance.
The same principle of cornerstone habits holds true in investing (not mentioning how important a sound body and mind are for an investor).
Keystones for an investor
If you device a plan, a well thought out strategy, it becomes easier to temper yourself, not trading on emotion, which in turn provides time for doing the warranted research and math, which makes for a solid base to actually both improve on your strategy and actually following it. Whether you start with the plan, with controlling your emotions, with doing the math or with practicing patience isn’t that important. Adhering to just one of the habits tends to strengthen the other. That’s the magic of keystones.
The 12 components of TAOS, or the 4 major themes that the twelve build upon are those cornerstones when it comes to my style of investing:
Have a plan
Do the math
Through this link you’ll find the special artwork that Imcite has crafted based on my ideas, if you are interested in a physical reminder of what I consider the most important cornerstones of investing.
What daily/weekly routines and habits can you think of that would A) fit your life and B) have synergistic effects on the rest of your life, i.e. catalyzing other positive activities that in turn strengthens the original key habits? Check out this post about my keystone habits if you need some inspiration.
- How about setting aside an hour every Sunday for preparing and scheduling your work for the week?
- Or, why not walk outside for half an hour every day right after work (perhaps start with 5 minutes and build from there. Aim low to get high)
- A wild card might be gauging your cognitive and physical status before trading (T-score), and adjusting your sizing and preparations accordingly
Hey! Subscribe to my newsletter or share this article with your social network if you want to make the world better.
Free TIP: Check out TIC! It's the distillation of my 30 years as a finance professional
In just 6 weeks of online studies of videos, text documents, screen captures & spreadsheets, The Investing Course teaches you how to Identify, Analyze, Invest, Optimize, Evaluate investments and asset portfolios. It's thorough, pedagogical, easy and fun (well...) for any motivated student.
P.S. As an early TIC member you will have access to all future updated and enhanced material that will be added to each new class of The Investing Course, as well as the private TIC online forum,