Tuesday February 9, 2010 7:45 PM ET
SmartMoney
Published June 15, 2009  |  A A A
Tradecraft by Jonathan Hoenig (Author Archive)

When It's Time for Some Downtime

The days of the market closing at 4 p.m. are long over. Over the past decade, technology and globalization have transformed finance into an all-encompassing, 24-hour faucet of breaking headlines, price action and trade. From Sunday night to Friday afternoon, money never sleeps.

In the U.S., futures contracts for every major stock, bond and commodity trade literally around the clock. Personally, they haunt me: prices for gold, stock indexes and bond markets are the first thing I look at when I wake up and the last thing I check before I go to bed. Even some amateur investors are accustomed to waking up and gauging the premarket futures. In modern markets, you simply don’t get a break.

During waking hours, it’s also easy to get overwhelmed. Between following prices, reading reports and evaluating companies or funds, there’s an endless amount of research one can do. Of course, none of it makes any difference in how shares of XYZ will ultimately perform.

The past year has seen some of the biggest volatility, both on the way down and the way up, in stock market history. Beyond the economic loss, the turmoil on traders’ nerves has been unmatched. There was Joseph Luizzi, he CME floor trader who committed suicide after losing a fortune of the floor of the exchange. Or Agnes Wu Man-Ching, the Hong Kong stock commentator who broke down in tears on air upon seeing shares of HSBC (HBC) plummet 24%.

To that end, every investor needs a respite from the daily uncertainty and stress of the markets. Something as simple as a walk, a bath or an hour of mindless TV can provide the necessary distance to help stay grounded, even when it feels as if the markets are turned upside down. I’m certain you’ve got a number of your own favorite distractions, which I’d like to hear about. Below I’ve listed a few of my own.

Food Network

I’ve written before about the bizarrely calming effect of Food Network and its restorative qualities are even more pronounced during tough economic times. I’ve never once heard Bobby Flay or Paula Deen mention the yield curve or spend even a moment discussing the creeping inflation being created by the government’s stimulus efforts.

For that reason I find Food Network a wonderful way to escape. After a long day wrestling with the stress and uncertainty of the economy, there’s something about watching Guy Fieri eat a hamburger or Giada De Laurentiis chop fennel that calms me like nothing else.

Exercise

I often joke that while my money might travel around the world, my butt tends to remain firmly planted in a chair. No matter at what level you operate, investment is a rather sedentary business. The most exercise I ever got in investing was as a floor-running clerk at the Chicago Mercantile Exchange (CME). Even then, I rarely broke a sweat.

Investors are constantly forced to make decisions, a process that is benefited greatly even by a short 20-minute walk each day. Exercise promotes a clear mind and gives you an opportunity to collect your thoughts away from the stress of flashing tickers and fast-moving markets.

Take a Tub

Alan Greenspan is famous for his morning ritual of reading in the bathtub. And like the former Fed chairman, I also find the tub to be an excellent escape from the tension of the investment world.

So much of investing involves dealing with factors totally out of our control. The tub, however, is an environment we control completely, and being pampered — even just slightly — unquestionably will improve your mood when the market isn’t behaving as you’d like. So turn the ringer off, light some incense and retreat to a long, quiet soak. For mental health, it’s a low-cost indulgence with a high return on investment.

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User Comments
Posted by: haschultz
For diversion, practicing golf is great. You can enjoy the challenge of hitting balls at the range as well as your chipping and putting.

It never fails to bring up random thoughts of value which you will not have sitting around focused on the tasks at hand (same is true of walking, biking, jogging, weightlifting).

A focused mind is a great thing...........but it is constrained to the task at hand. Diversion is good to bring up those other thoughts that can be of great value.
cgm205

110 Comments
Good article and good advice.

After exercise(just getting on my bike and taking off for a while) I find that reading is a great relaxer. After reading enough books on stocks, Graham to Klarman to some lesser stuff to make me rich and still having lost about 30% too, I relax with something like John D. McDonald's Travis McGee series. Travis is so good, that even if you lost big you know he could get it back for only 50% .
Posted by: HowieG
A small garden is a nice diversion. One kernel of corn yields up to 100,000% in just a few months. That helps keep things in perspective after loosing a mere 30% or so of your stock assets last year.
Posted by: HowieG
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