How Often Do You Check Your Stocks and What Does It Say About You?
I’m a genius and a magician. I invest in stocks and they magically go up. Shopify. Up. Apple. Up. Paypal. Up. Pinterest, The Trade Desk, DraftKings, up, up, up. But what happens when the market starts to pull back or worse, we head into the next recession? Will I still be a genius or will I go back to being just an average investor waiting for the next wave of euphoria?
Speaking of euphoria, that was the title of a New York Times article last week highlighting the irrational nature of this rise. The writer reminds us that the last time the market reached these valuation levels was 2000 when nearly 40 percent of the market’s overall value was wiped out.
What interests me isn’t the rise and fall of the market. We know another recession will come because recessions happen, on average, every four years. No, what interests me is my reaction to that drop. Will I became angry and irritable? Will it make me depressed? Will I appear shorter in the mirror? Will my attractive love handles be rebranded regular fat? Will my schmekel shrink? Will I do something silly like sell some of my favorite positions or worse, eat a mini-chocolate eclair every day from my favorite bakery until I explode? What I’m really wondering is will I be strong enough to maintain a level of confidence, both personally and financially, when a noticeable percentage of my savings temporarily vanishes?
Financial Routines
Whether you check your stocks daily, weekly or monthly, we all have financial routines. I’ll admit mine includes a fair amount of nervous anxiety sprinkled with a smidge of OCD. I naturally wake up around the time the market opens at 6:30AM PT and check to see how the market is moving and whether there is any big news about any of the stocks we own. I’m not checking because I’m trading in and out of anything on a daily basis, I’m checking more as part of my daily routine and to stay abreast of the market’s overall movement. I don’t watch CNBC all day. I don’t have a Bloomberg Terminal. I can’t stand Bloomberg! I may login again around lunchtime to see if there have been any major swings but I mostly check the market once in the morning and once at the end of the day. The whole thing takes less than five minutes.
Is that healthy? Should I check my portfolio more often? Less often? One of the greatest investors of all-time, Benjamin Graham, said you should check your portfolio once a year but Ben didn’t have a Twitter account. Cell phones and social media turned me into a different person. I literally can’t remember what life was like pre-cell and The Social Dilemma made me painfully aware of how addicted I am to checking email, texts, social media updates, stock prices and sports scores every 10–15 minutes. I’m not proud of it. It just is.
I wonder if every investor is the same way? I know we’re all addicted to our cell phones but what percentage of non-day trading investors look at their portfolios more than 2–3 times a day? Spotify delivers “Spotify Wrapped,” a yearly analysis of people’s listening habits. We need Fidelity, Vanguard and Schwab to do the same. Robinhood, the investment app for humans under 30 with ADD, sent its users a year-end recap. One 20-year-old college student checked the value of his Tesla stock 18,656 times in 2020. At least I wasn’t as obsessed as him. Loser.
Checking The Number
There is one number I am obsessed with. Our family’s savings. My wife and I have been saving and investing for nearly 30 years and we finally reached one of our savings goals in 2020. Since that time, I find myself obsessing about that number in that I don’t want our savings to drop below it. In addition to individual stock prices, I check this number twice a day when I login to my brokerage account. I don’t know why. Most of our money is in retirement accounts, so it’s not like any of it is immediately available. Maybe it’s a sense of security. Maybe it’s ego. Maybe it’s a dopamine rush. Or maybe it’s fear. One of my fears is that a recession will hit, our savings will drop below that number and we’ll go through a lost decade, like Japan.
What would American investors do if we entered a decades-long decline in securities prices à la Japan? As a nation, we could take up a bunch of new hobbies. We could longboard, drink Ocean Spray and sing Fleetwood Mac songs. We could get really serious about recycling and build up our BottleDrop accounts. We could adopt more puppies. Or maybe the next recession will serve as a reminder that we all need to take a break from checking our stock prices and portfolios so much and do something more productive with our time.
A few months ago, I encouraged my father to figure out how to login to his brokerage account online so he could see how his accounts were performing in real time instead of waiting for his brokerage to send him a monthly statement in the mail. The mail! At the time, I couldn’t believe that he didn’t mind waiting until the end of each month to know where his money stood. The more I think about it, the more I think he could be onto something.
