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Open original source ↗The Nasdaq 100 dropped 1.3% Thursday and somebody asked me how to stop feeling it.
My answer: two portfolios that NEVER touch.
➡️ Portfolio one is for trading. It's the small one. Day trades, options, sold puts.
➡️ Portfolio two is the 10 year portfolio. That's the real money.
😇 They shouldn't mix with each other.
➡️ The trap: buying a "long term" stock, watching it drop, and suddenly managing it like a trade. We've all done it.
➡️ And six months is NOT long term. Money needed for a house in six months is a trade, whatever it gets called.
➡️ Stocks are only a portion of net worth. All in on one name is psychologically brutal, even a name I'm bullish on.
😇 The stock market will make you an emotional mess and then when you're emotional you end up making mistakes.
➡️ Wall the two off and a red day stops feeling like an emergency.
✅ For the record: the Nasdaq 100 closed Thursday about 2% below its all-time high.
➡️ Two percent. Breathe.
🚨 The risk: two buckets don't fix a bad stock. If the thesis is broken, the 10 year label is just a slower way to lose.