Leave The Past In The Past

Fighting the great bear market of 2008 has left many a scar on investors' portfolios. And for many, it has been especially painful to review the full-year performance data if you've been brave enough to do so yet. In my experience the vast majority don't really come to terms to how they really performed until they have to do their taxes, but the best investors and traders know where they stand at all times.

Needless to say, in both good and bad times we must always take a moment to review our performance so we can learn and improve. But, more importantly, we also have to learn to leave the past in the past where it truly belongs.

While it is human nature to dwell in our past mistakes and success, doing so is not helpful and we must resist the urge to waste time in such endeavors. For example, if 2008 was a bad year for you the loss of confidence can create a huge hurdle to overcome this year. Many investors will never be able to overcome it and I've personally seen more traders than I can count never come back following a very tough year. All of us, especially those of us who make a living in the market, will tend to dwell on our mistakes more than our success. To a point, that can inspire change and inspire innovation and new dedication, but for others it can and often destroys them. Those who win in the market long-term must face this challenge head on and overcome it.

For some of you, the opposite is true. If you've had a great year in 2008 (and I was extremely pleased to discover from my annual membership survey that many members did), overconfidence and hubris can equally present an enormous challenge and lead you into big trouble. Already I've received a number of emails from people boasting about their performance in 2008. Frankly, I've never seen one good trader engage in that type of activity. Instead, good traders put the past where it belongs and focus their time and attention on what matters the most - making the right decisions right now for their portfolio. Those of us who've been around the block a few times have already learned this and you will as well in time if you haven't already.

In the end, no matter how 2008 was for you, it's time to put it away and focus on making 2009 the best year ever.