DODAR
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:
Diagnose
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?
Options
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?
Decide
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.
Act
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
Review
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!
Source wikipedia
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
Podcast https://open.spotify.com/show/6ZsgB344CImYjkvNX1lc3w
The information in this article should not be interpreted as individual investment advice. Although Hugo compiles and maintains these pages from reliable sources, Hugo cannot guarantee that the information is accurate, complete and up-to-date. Any information used from this article without prior verification or advice, is at your own risk. We advise that you only invest in products that fit your knowledge and experience and do not invest in financial instruments where you do not understand the risks.
