EquitiesInvesting

High Frequency Portfolio Monitoring: Confession Time.

Robo_hamster_peeking_from_coconut
Beating the Meow Jones Industrial Average. Easy.

I have a confession to make, I check my portfolio often…

Way. Too. Often.

(So often, I’m in two minds about disclosing it).

Like a Skinnerian lab rat on drugs, I seem to be wired to check. Portfolio up and there’s a rush of blood to my head, a subtle yet sublime satisfaction. Portfolio down and I feel like I should re-check my investment thesis or search Google for any company news.

This tells me two things – the first is that if I want to improve my return and my value investing skill, I need to tune out from the market (not to mention my sanity). The second is that maybe I should just become a passive investor, strategically buying ETF’s on down turns whilst mostly just dollar cost averaging, happy beating the market return by a few pips. Whilst passive investing is seductive on many levels (ok, not that seductive!), my more rational self is a dyed in the wool value investor. And I think I can beat the market.

But checking ones portfolio often has actually been proven to reduce returns. It leads to less ‘risk taking’ behaviour, and I imagine, a propensity for switching out of an investment after a decline in market price, hindering any potential recovery while incurring trading fees. Do this often enough and I’ll be an expert in losing money.

So, I’m running a little lab rat experiment of my own.

From 20th August until 1st October 2017 I’m not going to check any of the following:

  1. Retirement account
  2. Investment portfolio
  3. Spreadsheets tracking the above
  4. Apps tracking the above.

This means my net worth update for September won’t be accurate, but really, who cares. I’ll carry the prior month forward.

Hopefully this lets me focus on what’s important, saving for my future, valuing businesses over monitoring market prices and just living my life.

To up the stakes a little, I’m creating a downside. Each and every time I check during this period, I’ll post it here (if I check!). Hopefully that’s incentive enough for me to resist over the next 6 weeks.

I’m gonna post this now before I change my mind and squirrel it away for the rest of eternity, deep into the dark recesses of the ‘drafts folder’!

How often do you check your portfolio? Does it bother you? If you’d like to join me in this experiment, ‘sign up’ in the comments below – we’ll see if we can go until 1st October oblivious to our portfolio market values!

 

 

16 thoughts on “High Frequency Portfolio Monitoring: Confession Time.

    1. Hi Lance, thanks for the well wishes! I’d like to check once a month max. If you’re tracking contributions etc. every 2 weeks seems fine, I think it’s important to find what works for you and lets you sleep easy at night. Sounds like you’ve done that already 🙂

  1. Good luck with your mission. If any you will experience less stress.

    Altough I’m just starting out I check regularly. And since I started the only thing I see is red on my total capital value so that doesn’t really feal right. But in any case I’m stiill plugging along and not checking that often 🙂

    1. Thanks in10, I’m looking forward to it. The stats I read indicated that the odds of seeing a loss are about twice as high checking daily vs monthly (on any given day it’s about 50:50 but in any given month it goes down to < 30% chance of loss).

  2. I know what you mean. I’ve only just had my super account made recently as well as a new CommSec account and I find myself almost obsessively checking them both at least once everyday. But when I see stocks go red is when I go yay time to put some money in.

    I’m weird like that I guess. Also I don’t really plan on ever selling any of my investments so there’s also that.

    1. Hey QD, it’s great to be thinking about adding funds on after a downward move. I’m similar to you with my super – goes down and I can’t wait to add a little. Odd that with my personal portfolio it’s the opposite. Although, given the money manager is me it might change the dynamic! Best wishes growing your retirement fund and thanks for stopping by again.

  3. I see my overall balance when I log into my banking each fortnight. I probably click through and see what is up/down and how much my portfolio is up overall once a month. I don’t make fancy spreadsheets or graphs, or make any buy/sell decisions, I just acknowledge and move on. I don’t see any benefit in looking every day or stressing about where it is at. It’ll grow over time.

  4. Haha, I know exactly what you mean WF30! I used to do that a lot, but now I don’t really. I like to read the business news a lot and I like to see what shares are down so we can decide what to buy, but I don’t stress what our shares are doing because we can’t do anything to affect the performance after we’ve bought.

    Good luck with your experiment, I hope it helps 🙂

    Mr DDU

    1. Glad to see you again Mr DDU. I don’t worry too much about affecting the company performance either (thankfully, that’s something we’ve very little control over) and I agree with a larger cash balance a down turn might indeed be an opportunity. Hope you’ve been finding a few this reporting season.

  5. This post certainly seems to be striking a tune with fellow bloggers. I must also confess I was checking frequently when I started my investment journey. The first 6 months had me checking daily. Having said that I am only just coming up on year since starting out. I am now only checking every fortnight, tho I will admit that If there is an Announcement made by any of the companies I have investing in I do check the notification. I think for good mental health it is ok to check, just not compulsively.

    I really like how Miss Balance wrote this: I just acknowledge and move on. I don’t see any benefit in looking every day or stressing about where it is at. It’ll grow over time.

    Such a good way to manage this. Especially the sound judgment, that way no rash decisions are made from the small snapshot that the share is down or up. Managing it this way, you do not make an emotional decision.

    Keep it up WF30 and let us all know how you go

  6. We’ll let you know if there is a market crash so at least you can go into ‘buy’ mode – which would be a perfectly acceptable reason to break this resolve.

  7. I think this is most of us, especially at the start of our investing activities. I don’t check my portfolio daily anymore but I still check business news and research to find out if there’s anything I can buy. I also update my spreadsheets twice a month, so I see the numbers that time too. In saying that, I don’t really get disheartened with red numbers. Haha!

    Good luck with this plan! I personally don’t have the will to do this myself, but I will cheer you on! 🙂

    P.s. love the new look!

    1. Hi J, glad the new look is appealing 🙂 and thanks for your comment.

      It’s great the red numbers don’t phase you. I don’t really see anything wrong with checking often if it doesn’t affect you, but for me I just have a pattern of wanting to re-check soon…that kind of personality I guess. I still read the business news most days and am keeping an eye on a few individual stocks, but aside from that it’s nice not to be looking at the market.

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