Establish Accounts to Release Your Inhibitions

If you’re a strong trader you will find your trading accounts will almost always outperform your longer term accounts on a long enough time frame. Vice versa, if you’re a poor trader. For anyone delving into the world of personal finance, I strongly advise that you keep separate accounts for long term ideas, experimental practices, and trading. This way your focus is clear and the mandate for those accounts never get muddled. I cannot tell you how many times, when I was younger, that I violated the ethos of my accounts — thinking of XYZ as “long term” only to later on be lured into another stock and missing out on the long term success of XYZ.

Set static rules for your accounts and stick to it. If your thought process for $BTC is capital gains — you’re looking at it wrong. Bitcoin is a current hedge. Each day of work you make dollars and those dollars, hopefully, increase your net worth. If preparing for a Mad Max world where the dollar will one day be worth less — it would BEHOOVE you to not maintain a percentage of your liquid assets in what you deem to be a currency hedge. Ergo, maintaining a 5 or 10 or 15% allocation into $BTC should be a life long journey and process.

Same could be said about conviction long ideas. Perhaps $VKTX is too volatile for short term trading accounts. But what if you believed their obesity drug was life changing. Drop it in your long term account at 5% of assets and should it get mired in a sell off and cut in half — determine to bring the percentage back up to 5% with an average down.

To be content when trading is hard. Today I only made 12bps because I didn’t see the market well. However, my quant made +130bps and my longer term strategic account +90bps. Emotionally, the success of those accounts made me feeeeel better and I understand that, in regards to my trading, it’s only a matter of time before I see the seems on the ball spinning and will crush it out of the ballpark.