I must honestly confess that I did not know the term, DODAR. Do you? DODAR stands Diagnose – Options – Decide – Act – Review and is used in aviation by pilots when a problem arises.
Of course, this column is not about aviation but about investing. But in both cases you would rather not crash so you can apply the DODAR technique in investing too. Everyone knows by now that unforeseen situations can arise in the stock market too, even if you have fully or partially covered risks. Anyway, back to solving problems, which of course can always occur in investing too. I think an investor would do well to handle that through the aviation methodology:
What exactly is going on, are all stock markets in the red? Or is there 1 stock with bad numbers dragging down your asset value that day?
By this I mean not only stock and index options but mainly what are the choices to further hedge eaen further decline in the markets or a specific stock. Or is it an option to also just sit out the weaker phase of the market without margin problems?
This is of course crucial after the previous two stages. If you have gone through the previous two steps properly, you will thus arrive at an informed decision based on your own objectives your investments.
That decision could be, for instance, that you decide to sell an individual stock with bad figures that day in order to limit the impact of individual positions on your assets.
Of course, if you have everything perfectly laid out on paper, it still needs to be done. One of the great things about the stock market is that through the platforms you can give instructions in advance to send orders to the exchange. For example, with stop loss orders or other conditional orders. If you want to learn more about submitting orders with conditions, start a course in online investing via the education platform academy-for-investors.com
Another great one, even if you sometimes have to act like an unfeeling robot, it is obviously good to periodically evaluate your investments and your decisions. Did you do the previous steps right? Or do you want to proceed differently in the future. Of course, you remain in charge when investing yourself!
If you would also like to invest yourself in this way, or if you have any questions or comments, don’t hesitate to contact me!
Taco te Gussinklo
Taco was an active investor before joining Hugo’s team. He writes columns for various magezines and websites.
‘’Understand your options’’
Vlogger at https://www.youtube.com/c/hugoinvesting
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