Stock Doc: Breaking Out of a Mental Slump

The high-powered professionals and athletes I work with nearly universally admit to minimizing their focus on their big triumphs. They instead worry about carrying feelings of failure for way too long. Ballplayers and investors alike want to be clutch in every opportunity that is presented to them.

Unfortunately, even the best hitters in baseball fail 7 out of every 10 plate appearances. It is important to remember that as investors, no matter how experienced you are, you need to expect both cycles of being right and being wrong spread throughout a year.

Even the best investors can be crippled by irrational expectations of their performances on each trade. Here's some things to think about the next time you find yourself pressing:

Quality and not quantity: Whether it was a bad outcome for you on a trade with Coca-Cola or DaimlerChrysler, it is imperative to shake it off, clear your head, and try to be right only a few times over your next nine trades. Stop striving for perfection. Individuals usually make the most money on a small percentage of their trades each year.

Perhaps you were squeezed out of your position prematurely? Realize your mistakes early and reassure yourself that you only need to capitalize on a small amount of plate appearances. It is the quality of the trade -- or each at-bat -- that makes you more confident.

It's a long season: A-Rod and all of the Yankees fans will experience heartache this year if they overanalyze his performance in each game and each at-bat. Unless he ignores the belief that "you are only as good as your last at-bat," A-Rod will continue to struggle in clutch situations.

As an investor, you must believe in yourself, your strategy, and your ability to make tough decisions when the heat is on. Each failure or negative outcome brings you closer to a chance to shine and make money.

It's the Law of Averages: Slumps are a normal part of a fluctuating cycle for athletes and investors throughout a full season. Don't get bogged down in episodic slumps. Let it all come down to the end of the season to measure your overall performance. Then you can go back and micromanage your winners and losers.

Breaking the mental cycle: It ended up being quite a weekend for A-Rod. He hit a game-wining grand glam on Saturday and another home run on Sunday, as he continued to show more consistency in his early season performance. It is important for him to ride this wave of success this year and avoid falling into the mental traps that crippled him in clutch situations last year. It's the same for investors. Enjoy your winning cycles and leverage your trades when you are hot. This way, failures hurt less, and you can shake them off quicker.

After all, cold streaks are just a part of the game.

Please write to the Stock Doc with your trading, emotional or investing dilemmas. Dr. Cass always welcomes comments and stories, for which he'll try to offer valuable solutions in later columns.