“(Sitting On) the Dock of the Bay” song just about gives me the melancholic chills I need in these desperate times. Released some 50 years ago (and less than a month after Otis Redding death), the song unpacks that raw sad feeling of loss that can only resonate with anyone experiencing tough times.
And what a trying year 2020 is turning out to be! Staring at large trading losses is devastating – not only financially, but emotionally. And, with the coronavirus pandemic continuing to spark wild swings in the markets, they are becoming all the more desperate and fearful.
Understandably, experiencing the carnage has taken its emotional toll on the trading community. But as defeating as losses feel, how one reacts to a loss is more important than the loss itself.
First things first, accept responsibility that you’ve taken a loss and own your past trading decisions. Secondly, stop trading and take a break. Thirdly, try to put your loss in perspective – some losses are beyond you (as the coronavirus-driven sell offs have shown).
Fourthly, refresh your trading plan for the future after assessing what happened in the past. Lastly, get back in the game when the opportune time comes and execute the plan.
Meanwhile, stay optimistic. Always keep in mind that major market collapses have tended to see big rebounds.
In fact, major bounces can happen even within a continuing downtrend. Although, known support levels didn’t offer much help during NSE’s decline, the market is less likely to travel down further from this point and would probably find a new “major long-term support” area in the coming weeks.
With that said, permit me today to act as music therapist and state the following. The soothing power of music is an extremely effective stress management tool. Researchers at Stanford University have said that “listening to music seems to be able to change brain functioning to the same extent as medication”.
They noted that music is something that almost anybody can access and makes it an easy stress reduction tool. This is so, as music can absorb emotions, acts as a distraction at the same time helping to explore emotions.
That notwithstanding, the act of listening has to be a very deliberate act – people are known to avoid actively listening to music when they are stressed. Alternatively, singing (or shouting) along can also be a great release of tension – Karaoke is very enjoyable for some extroverts! Ultimately, productivity increases when stress is reduced, so this is another area where traders can gain vast rewards. It just takes a small effort to begin with.
So as investors ruminate over “buy” and “sell” decisions and plan on how to navigate tricky equity markets post this self-quarantine season, here’s my suggested list of artistes you can listen to and hopefully numb the pain – Mbarak Mwinshehe, CHIC, Pete Odera, Shalamar, Koinonia Band, Kenny Burrell and the AIC (Makongoro) Choir. And now, I give you the power to crank up the tunes and blast those beats.
Mwanyasi is Managing Director, Canaan Capital Limited.