Revisiting 2008's Goals

Boy, if I had any idea what 2008 was going to be like, I'm sure I would have made different goals. I went into the year pretty cocky after chalking up a +40% year using a mechanical stock screening trading model. I thought the S&P 500 would probably have another weak year, but I never imagined that it would drop 40%. These were my goals for 2008.

1. Beat the S&P 500--Shouldn't be too hard, but I'm already behind on that goal thanks to my irrational trading. I did beat the S&P 500 by 12.79%. Unfortunately, the S&P was down 38.5% so that means I was down by 25.71%. While I'm glad I didn't lose as much as the broader markets, I'm disappointed that I let myself get dragged down with it. As an individual trader, I have the opportunity to stay on the sidelines when things are not good, and I rarely did that. Most of my loss came while I was trading my stock screens (21%). I was able to stop the bleeding when I began day-trading, but in the last two months I made several "irrational" trades and ended up where I am today.
   
2. Beat Stock Superstars and Prudent Trader Newsletters Stock Superstars ended the year down 44.6%. The Prudent Speculator hasn't reported year-end numbers yet, but at the end of November the portfolio was down nearly 50%. Mission accomplished--but again, I can't make a living losing 25% in a year.
   
3. Make over 20% on my portfolio--My goal is to eventually trade for a living. If I can eek out 20% each year, I'll be able to meet my goal in the next 5 years. No deal on this one. I was never above +1% during the entire year. I'm planning on giving "trading for a living" a go this year, so I'm bumping up my plans despite a down year.
   
4. Beat last year's return--I'm not doing so hot so far this year. Last year at this time I was up 12%. I've got a ways to go. I only missed last years returns by 66%. Yikes.
   
5. Control my emotions--I'm a miserable failure so far this year. Hopefully, I'll get a grip and start doing better with this goal. I'd like to think that I made progress in this area, but emotionalism is still a struggle for me. I think going forward into 2009 it will be imperative that I learn to keep my emotional side under wraps.

The market provided plenty of humbling opportunities for me this year. It also forced me to change my game plan. My portfolio would have been down double what it was if I had continued following my stock screens without question. This just wasn't the year for mechanical investing (as the portfolios in newsletter screens clearly show).

In a way, I'm glad the year was so challenging. It forced me to re-think my strategies and to learn new things that were outside my comfort zone. I made my first "short" trade this year as well as my first day-trade. I made my first trade based on technical analysis (chart reading), used margin for the first time, and traded an index fund for the first time.

The things I've learned will hopefully give me more tools in 2009. It has been a crazy year. I'm glad it's over.