Don’t Look at Your Portfolio Every Day to Detach From the Volatility

Dave and Joyee on why checking your portfolio too often can lead to bad decisions—and the importance of understanding volatility in the stock market.

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I push hard for people to not look at their portfolio much. My experience and the formal research I’ll say says that the closer you get to it, the more engaged you get with it, the more likely you are to do something foolish and that the better investors focusing long term, stay unemotional, stay detached, literally detached, they’re looking at their portfolio infrequently.

What do you think of that?

You know what I, I try to not look at my portfolio too much either. Nowadays, when I first started investing, I mean, it is so exhilarating, right? Like watching your money grow or go down, I mean, it is just so tempting to go on my brokerage app and say, oh my God, like my money is up $2, and that, that makes me feel so good.

But I feel like the longer you start to invest, you kind of have the confidence that your money is building in the background. Whereas again, a lot of the early investors are just, they’re just excited.

I love that you really do have a lot of energy when you describe it as exhilarating, even when it goes down. I find that not so exhilarating, but I know what you mean. And I mean, that’s one of the things that you and I both have to do is we always have to prepare the younger generation for the volatility.

And I’m constantly reminding them that when you take on the potential returns of equities, one of the reasons those potential returns exist is because you have to put up with the ups and downs, the prolonged downturns and so on and so forth. They are inevitable. In fact, you’re gonna have a tremendous variance in performance.

We’ve been on a great run for a long period of time right now. But in general, stocks can struggle for years. They can go down dramatically in a very short period, and mentally, we’re always having to prepare people for that. They have to look past that short term pain and recognizing that they’re placing a bet on capitalism, a bet on human ingenuity.

That’s really what owning an ETF or stocks is all about.