Don’t Watch Your Investments Too Closely
An important concept to keep you on the right investing path is to not watch your stock portfolio too closely. In fact, once you’ve made your decisions and picked your investments, you should try to avoid watching your specific investments much at all.
Even though it’s important to keep an eye on the market and business and company news in order to stay informed and learn about the market, it’s more important not to get too involved in the market moves themselves. Don’t get in the habit of watching your investments every day. They will go up and they will go down, as stocks move up or down for many days in a row despite solid fundamentals, and it just doesn’t make sense to fret and worry about these movements.
Try not to pay attention to or get worked up over daily and weekly changes. After all, you’re in it for the long run right? And if you’ve picked good investments, they will go up over time.
Watching your stocks move can get addictive and very counterproductive. When I worked at a public company, I saw a lot of productivity lost to people watching the price of the company’s stock every day. Besides that, the more you watch the movements, the more stress you’ll feel. Even if you have no control, watching your investments throughout the day can lead you to believe that you understand the stock movements and can tempt you to start trading stocks.
Trust me, no one knows how to predict stock movements. While watching stocks it is really easy to think that you could make more money by trading, just as its really easy to watch a sporting event and think you could be calling the plays. However, don’t tempt yourself into this behavior and try not to watch your investments too closely.
Another negative that comes with watching your portfolio too closely is the measuring of gains and losses. For example, your portfolio will go up several thousand dollars and then shrink back to close to where it was. If you’re not watching too closely you’ll check in occasionally and see that your portfolio has risen or declined slightly. However, if you’re watching it every day and every hour, you’ll start calculating how much you could have made, or start wondering why you were “up so much money” and have “lost it”.
Anyway, I think we’ve made our point that overwatching your investments can be counterproductive and can lead to bad investing habits.
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