I remember a lesson I learned when I was first starting to rock- climb back in the sixties.  My buddy laid a 2 X 4 on the ground on it’s flat side and said, “Walk this 2 x 4 as fast as you can.”  Of course I walked it without incident and thought nothing of it.  “What would happen if we put this up about ten feet between two ladders?  Could you still do it?  What if we put it between two cliffs and you had a thousand or two thousand feet between you and the ground?”

The point was well taken.  Nothing had changed.  It was still a 2 x 4 on its flat side and still easily maneuvered.  What had changed was the exposure.  If I fell off the 2 x 4 on the ground there was absolutely no consequence.  If I fell when it was ten feet off the ground, there was a small consequence.  If I fell two thousand feet I would die.  The nature of the task hadn’t changed.  I was easily able to walk the plank on the ground, and so should have been able to do so at any altitude.  But in order to do so, I would have to have complete control over my emotions — focusing on the task, not the consequence.

It’s the same in the stock market today (and in businesses in all their forms.)  Stocks go up and they go down, then they go back up again.  If you can’t control your emotions when the exposure is high, (“Oh no!  I’m losing my entire savings!) you’ll sell on the way down and cut your own throat.  If you can take the emotion out of it you’ll be concerned, but are more likely react in a level-headed way, and not out of fear.  Fear is an enemy to success.  Fear makes you do things you would never ordinarily do — unwise things.

I think of the serenity prayer — God grant me the serenity to accept the things I cannot change, the courage to chage the things I can, and the wisdom to know the difference.   By controlling your emotions during times of stress, you’ll make good decisions.  By letting fear rule your heart you’ll make bad ones.  Be wise about overcoming your emotions.  When the price is low, you buy.  When the price is high, you sell.  That’s the task.  The ups and downs provide the differences in exposure.  Don’t let the exposure change the task.