First things first…
Unhealthy Fear is a liar.
This is the type of fear I felt when my cell phone rang that summer in 2006.
I was expecting the call. It was from my financial planner.
You see, earlier in the week, I took action.
I sold all of my stock positions and put the cash into bond funds like the iShares 20-Plus Year Treasury Bond ETF (Nasdaq: TLT)…
Without telling him.
Because I did my homework… based on Healthy Fear.
When the call came, I felt confident it was not to congratulate me on a job well done or to give me an A+ on my work.
Instead, the dreaded call progressed as feared and went something like this…
“What have you done?!
Why did you sell everything and put it into bond funds?
Do you know how horrible bond funds are right now?
What were you thinking?
Plus, do you know how much capital gains tax you’re going to pay?”
My first thoughts were…
“Yeah, well, the market is at a top, and bond funds are a value play in this environment. And since I am a CPA, yeah, I know about the capital gains tax… which is an awesome problem to have…
“It means you’re making money.”
But rather than blurt that out, I chose to listen…
And as I listened, he talked about his firm’s experience, longevity, and the prosperous U.S. future. Then he asked me to let him put the funds back into the equity market…
As I held my head in shame for what I had done, I relented…
Every… single… penny.
That… is… on… me.
“How could I do this to my family? How could I make such a bad mistake? He was the wiser one, not me. After all, I went behind his back — what a coward I am.”
I convinced myself that these statements were true and well deserved.
This fear… Unhealthy Fear… was a Liar. And that liar caused me great financial harm.
Fast forward to August 2007. This time, I was on the Ohio River in beautiful Southern Indiana with my sister-in-law when I saw yet another bad headline…
“Hmmm,” I wondered to myself, “Would my financial advisor call me now?”
Crickets since the summer of 2006, by the way.
My gut was about 2 feet under. I knew at that moment my Healthy Fear was right all along, speaking truth and reason.
Then there were more headlines…
“Surely he will call me,” I hoped. “Surely he was smarter than I was. He wouldn’t leave me hanging in a market about to tank… After all, that was a really stupid move on my part to sell in 2006.”
Bad tape. Wrong tape. Time to change the tape.
Meanwhile, crickets… And more crickets… Perhaps you can relate.
Long story short, what started in 2006 in Nevada ended in January 2009 in a grocery store parking lot with snow on the ground…
That’s when the next call came from my financial planner…
First, here’s the tale of two traders from Part I of this four-part series…
My “Fear Trade” from summer 2006 through year end 2008, using TLT to demonstrate the whole, looked like this:
The “Professional Trade” from summer 2006 through December 2008, using the S&P 500-tracking SPY ETF to demonstrate the whole:
Back to the phone call, it went something like this…
The “professional” said something along the lines of, “Ummm, I’m not too sure about what’s happening… I feel really bad… What would you like to do?”
Well, let me tell you, a million thoughts went through my head…
But there’s only one I took action on…
It’s why I’m here now, and it’s the reason I have your ear…
When Healthy Fear overcomes Unhealthy Fear, “CD” is the result.
When CD drives the process, the result is my money-making machine.
C and D — that’s how I went from point A to point B, and it’s the topic of Part III tomorrow.
See you then, and in the meantime…
Think and win!
Celeste Lindman Trading
If you haven’t already, join my Telegram channel here for frequent trading insights and market musings!
*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk.
- Healthy Fear Is Our Best Asset — Part I: The Path to Making Money
- Healthy Fear Is Our Best Asset — Part III: The Path to Making Money
- Healthy Fear Is Our Best Asset — Part IV: Actions That Pay and Assumptions to Slay
P.S. Did You Miss This World Premiere?!
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