Stock Doc: Healthy Mind, Healthy Profits

Case in point: There are a variety of negative outcomes that can surface when your expectations for absolute success on a given trade, investment or relationship are not met with reality. I had a client named "David" who crumbled emotionally every time one of his "sure thing" trades went awry. He was a perfectionist and a bit grandiose when it came to being certain about which direction a trade would go.

When it didn't pan out for him, he grew horribly depressed and angry. He became hypersensitive and would scream at his wife when she asked him politely to help her with a small task. There is nothing wrong with David having confidence in his trading ability, but his level of confidence created a blind spot and set him up for certain disappointment and household strife.

David needed to lower his expectations and make them more realistic when it came to the possibility of a "nonsuccess" -- this can be a more palatable term than the word "failure." He learned that to be successful and happy more consistently, he needed to tinker with his definition of success. He also needed to change his belief that he was an omniscient trader.

I always tell clients like David that even the best hitters in baseball will fail seven out of 10 tries at bat. It's perfectly fine to have a bad trade and still consider yourself to be a great investor, even if you're not the Ted Williams of your chosen profession. My advice? Brush yourself off, get back out there and keep on swinging for line drives --but not always home runs.