How you handle discouragement each and every day goes a long way in determining your success or failure in reaching your dreams.

I can think of no better inspiration than to borrow a little story from A.L. Williams’ book titled “All You Can Do Is All You Can Do But All You Can Do Is Enough.”  Mr. Williams is a true champion for the American consumer and investors everywhere.

The way the story is told, it seems that one day the devil decided to go out of business, and he decided to sell all of his tools to whoever would pay the price.  On the day of the big sale, they were all attractively displayed.  Malice, hate, envy, jealousy, greed, and deceit were all among them.  To the side lay a rather harmless looking wedge-shaped tool, which had been used much more than any of the rest.

Someone asked the devil, “What’s that?  It’s priced so high.”

The devil answered, “That’s discouragement.”

“But why is it priced so much higher than the rest?” the onlooker persisted.

“Because,” replied the devil, “with that tool I can pry open and get inside a person’s consciousness when I couldn’t get near with any of the others.  Once discouragement gets inside, I can let all the other tools do their work.”

Speaking of the devil, just by looking at the state of the stock market in 2008, you might feel like you are in hell anyway. Meanwhile, the ongoing coverage from the conventional news media has continually showered you with a regular dose of discouraging news - a little write-down here, and another technical breakdown there.  And after some investors get discouraged, in their relentless efforts to force profits from an uncooperative market, some impatient investors become tempted into trying an ever-changing list of trading tactics - deviating from proven guidelines that have yielded success.

If you have gotten discouraged, a big obstacle you now face is visualizing yourself in another role - the role of a successful person.  You must see yourself winning.  You achieve what you envision.  What you see, you become.

During my 20+ year career as a licensed representative in the securities industry, there were several very clear upswings in the market where it turns out I was in a great position to help a lot of investors take advantage and profit.  Two of those periods that proved to be especially rewarding came along right after very difficult market periods – times when investors could have easily been discouraged and unwilling to invest in stocks.  When the market got a strong follow through in late 1998 and launched into another great new rally, I helped many investors capitalize on some of the strongest leaders.  In March of 2003, another great new rally served up big winners that made a big impact for many portfolios that were concentrated in carefully selected leaders. I can see those times clearly in my mind now, and remember what the market environment (the M criteria) looked like then.

Those of you who have followed my prior INM articles might recall the recent studies of the Advance/Decline line that were included.  Improvement in that area would be a telling new development, but thus far that improvement remains elusive (I will bother to include a graph whenever there is finally a meaningful improvement in that department.  Eventually, and inevitably, there will be another time when the market’s odds are most favorable to investors’ success - and big profits will be easier to come by then.  In our minds, we all must have a picture of what that time will look like, and we must be ready to recognize it when it is upon us. We know from past experience that we can make big progress quickly when that time comes.  We most definitely will be ready to take appropriate action.  By preserving our working capital, and our mental capital, we won't be discouraged.