Global stock markets have been a tough place to make money this year. A casual glance at the back of this week's Economist magazine confirms that among the 57 global markets, only four are in positive territory. Saudi Arabia -- a market off limits to U.S. investors -- is up 25.9%, and is the only double-digit percentage gainer for the year. Brazil is second, clocking a gain of 7.8% and it owes almost all the rise to the appreciation of the Brazilian real against the U.S. dollar. The highest-profile and best-performing markets of 2007, China and India, are faring among the worst this year -- down 16.2% and 20.2%, respectively.

Winning Tactics On Today's Financial Battlefield: Don't Fight The Last Battle

Just as generals always fight the last battle, portfolio managers always invest in the last bull market. Think of how many investors are still waiting for Cisco to get back up to $80 -- eight years after the collapse of the tech bubble? Yet if you look at mainstream investment recommendation, you see the mistakes repeated today. Advisors who recommended Apple at $40 in 2005 saw it go to almost $200 -- and have now followed it back to $120 -- are still waiting for Apple to bounce. But when my mother sees in her IRA that Apple has collapsed 40% during the past three months -- underperforming an already weak market by more than 25% -- assurances of Apple's future prospects offer cold comfort. That's not to say Apple is a bad company or that its stock will never turn around. It’s just that the mathematics is stacked against it. Even if Apple's stock turns on its heels tomorrow, it will have to soar 65% just to return to its previous peak. And how likely is that in today's market climate? And how many advisors have been cut by the falling knife of "calling a bottom" on the financial sector or real estate? One overzealous London-based hedge fund manager has now put the fate of his entire publicly traded investment group in jeopardy because of a single, aggressive bet he made in buying a huge position back in September of Northern Rock, the United Kingdom’s version of Countrywide Financial. He's gone from hero to zero overnight.

Winning Tactics On Today's Financial Battlefield: The Secret of Feeling Good

By focusing on the financial crisis du jour, you are making it harder on yourself than necessary. If you want to feel better, just stop watching the news. The media bombard us with negative news in the ratio of 13 negative stories to one positive one. I find it astonishing how quickly yesterday's crises fade and how fast they are replaced by new ones. Three years ago, I remember reading a headline in London that by 2008, "mad cow disease" would claim 55,000 lives in Scotland alone. And remember how we were all going to be wiped out by the SARS epidemic? Listen to the media and you'd think the world is a real-live, relentless, never-ending disaster movie.

So here is a quick tip to live a happier financial life.

First, stop reading this, and all other financial media today, or just realize that 99% of it is simply entertaining "noise." The media's collective negative bias is just making you feel worse about the world than it really is.

Second, only look at your portfolio once a year, say on Dec. 31. Had you followed this strategy beginning in 1994, assuming your portfolio broadly replicated the performance of the S&P 500, you'd have only had three "bad days." Why is that? Since 1994, the S&P 500 has had only three down years. Psychologists have determined that the twinge of pain you feel from a loss is approximately three times as intense as the pleasure from a gain. That gives you even more reason to restrict yourself to a low frequency financial information diet.

Winning Tactics On Today's Financial Battlefield: The Secret Is...

The ability to manage money successfully in a wide range of environments demands more than technical competence or facility with whizz-bang financial models. It demands something they don't teach you at Harvard Business or (in my case) Law School: a flexible psychology. Financial markets teem with "one hit wonders." Limit your focus to a hot stock or sector -- whether it’s China, Apple, or Indian outsourcing companies -- and you become a one-trick pony. Yes, you'll look smart and make some money. And if you're lucky, you may even get to keep some of it. But never confuse brains with a bull market. What seemed like a good idea last year is an embarrassing financial faux pas today. Just ask investors who bought into PetroChina last summer when it became "the world's first trillion dollar company" -- even as Warren Buffett was selling.

You have to accept -- and expect -- that every investment theme will run out of steam. In 1999, anyone who could fog a mirror could make money in Internet stocks. Ditto for China stocks in 2005 and 2006. But don't to try to "earn back" your losses by doubling down on yesterday's ideas. Accept that when one idea runs out, it is time to move on. That's what is so great about pre-determined stops. Once you have cash in hand, your mind clears and you can focus on other profitable investment themes in the marketplace.

Today's hot sector is commodities. After being ignored for decades, commodities are just starting to seep into investors' consciousness. I'm not smart enough to pinpoint how long the commodities boom will last. But I am smart enough to know that it will end one day. Until it does, they are a better bet than trying to catch the falling knife of financial stocks or homebuilders. No matter what the state of financial markets, there is always a strategy out there that can make you money. You have to be smart enough to recognize that opportunity and, more importantly, detach yourself from yesterday's themes that are no longer working. It sounds simple. But it's not easy.