The Case For Ignoring Your Investment Portfolio

Today I was tempted to check-in on a large investment that I just finalized yesterday.

I was feeling a little bored at work and felt like opening my Robinhood app and taking a glance. Maybe there would be a pleasant surprise that lifted my mood, or so I must have thought.

Actually, I’m giving myself too much credit— this wasn’t something I thought about, it was an instinct, or more like an itch I wanted to scratch.

Just writing this out loud makes it feel obvious how impulsive and silly it was.

That’s the problem with phones and having an endless number of ways to distract yourself with them.

Thankfully, I came to my senses almost instantly and decided against checking my portfolio.

Long ago I learned about the unexpected benefits of ignoring my investments and have tried to live by that rule ever since.

Here are a few reasons why I think almost everyone would benefit from the practice:

It’s less stressful not to check.

Constantly checking keeps your portfolio top of mind, and makes your brain think something urgent is taking place every day.

And because we’re talking about money, one of the most emotionally-charged subjects, this is not mere entertainment.

If you check your investment daily, you’ll see it down about half the time. 

Bump that to once a year, and you’ll have a 75% of being in the green— that’s because the market is variable on a day-to-day basis, but over the long term tends to go up.

You can easily avoid the unnecessary stress of seeing your portfolio down by looking less often.

Frees up your mental energy.

Do you think your mind is more or less free than you want it to be?

If you’re like me, and feel like your brain is already running faster than you want, why add another thing to the list.

This is especially true since you gain nothing from checking frequently— there’s nothing you should be doing.

My favorite style of investing is a passive, which doesn’t involve regular decision-making.

It’s perfect for “average” investors like me.

I prefer to give my precious attention to the things and people that matter most to me, not watching numbers go up and down on a screen.

Lets you focus on the plan, not the noise.

Our brains are designed to find patterns in the world, even if there are none to be found.

When you check the stock market daily or multiple times per day, it’s hard not to look for reasons why things are up or down.

And from there, you’re one small step from extrapolating that something must be done.

Over the long-term, we know that the stock market goes up about 10% a year.

In some years it’s lower and in others it’s higher.

That fact alone should be the key guiding fact of your investment strategy.

You should want to hold onto your investments as long as possible and earn something in the general ballpark of that number.

Who cares what happens this week or even this year, if you’re in it for the long haul?

Don’t let the noise distract you from that beautiful, simple plan.

Avoids emotional decisions.

It’s common wisdom that people who trade more often earn lower returns.

Not only are there transaction costs for every move, you’re allowing more chances for your fickle emotions to get you into trouble.

The right play, when it comes to investing, is to maximize your time in the market, and take advantage of the magic of compounding returns.

Sure, there are a handful of people in the world that can do better than this, by a few percent per year, but are you really one of them?

There’s just as much of a chance that fear or greed will cause you to get carried away.

You might sell when you should be buying, and double down when you should be riding things out.

Your best bet is to leave your emotions out of it and simply enjoy the freedom of not having to worry about your money as it grows.