The Kirk Report |
Posted: 29 Jun 2011 10:18 AM PDT Many have asked me over the years how I trade while on vacation. Here are my two rules: 1) I don’t trade during vacation, and 2) I close out all positions no matter what their upside potential before I leave. There was a time when I wasn’t nearly so smart. Like others I would drag the cell phone and laptop with me and every single chance I would get I would check in to see how the market was doing and my positions. I know I’m not alone in doing that since every single time I go on vacation I see groups of people doing the same thing from the strangest of places. In fact, I recall not too long ago sitting and holding hands with my dear wife on a beach in Kauai enjoying a most amazing sunset while others were not paying any attention and instead had their heads and eyes only on their laptops, iPhones or other gadgets. Talk about a missed opportunity! Sooner or later, many of us learn to mature and wise up. Vacations are for taking time away from the market and not for working. Like most lessons, I wasn’t smart enough to realize why without first having the lesson taught to me in a most painful and memorable manner. Back in the Spring of 1999, my wife and I were on vacation and I took my laptop so I could trade. I recall being really juiced up because I had a trade in play that was already blowing past my profit targets daily and looked likely to make my month if not my entire year. At worst case I thought I could at least pay for the entire trip just with the profits from that one trade. Well, you can probably guess what happened next. While sleeping in a little bit during during our trip, I woke up a little late to finally check in and quickly discovered that my trade was down by over 30% after some speculation that the stock I was trading had cooked its books. Not only was I terrible vacation partner for that day, but the whole trip was ruined because I couldn’t stop beating myself up for being so stupid. To this day, that was one of the worst vacations we ever had! So, please learn from my experience. When on vacation – be on vacation! With that said, I know many of you treat the entire summer as a pseudo vacation period away from the markets. I know this because website traffic slows down significantly and my email inbox suddenly becomes almost manageable. The period between the first of July and the end of August before the kids go back to school is when most people tune out. And, in recent years, the market’s performance has given them plenty of justification for doing so. For those who are looking to scale back a little during summer but NOT trade during their vacations, I think Alan Farley’s advice on how to trade remotely can be of some help. Here are his 10 recommendations:
This is a very good set of recommendations. In fact, many of these are also appropriate for those of you who cannot stay on top of the market as much as I can most of the time. A common theme you know I stress so very often is how important it is to use and adopt a trading and investment strategy that is in complete agreement with the amount of time, skill, and effort you can put in. Vacation time is no different. And, always remember, the market and its opportunities will be here when you return! |
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