What caught my attention this week.
A A fortnight ago I posted a couple of reader surveys asking you how often and how you review your investment portfolio.
Over 2,600 of you voted! Thanks to everyone who clicked to England monevador.
I promised to share the results. They can be especially interesting for those who check their portfolios less frequently.
(Because presumably you’re not the type to go back to the original article after a week to see how others voted…)
how often is normal
The first important conclusion is that more than half of monevador readers (yes, the ones who voted in this poll, the stats freaks) check her portfolio at least once a week:
In fact, just over 80% of us check our portfolios at least once a month!
This is a pretty incredible statistic. I hope my co-blogger the accumulator he doesn’t read it, given how often he’s warned against fanatical portfolio monitoring.
Of course, it is reasonable to assume that regulating monevador readers are more committed to their portfolios than most private investors. And also perhaps that the type of person who will vote in a poll that is of interest to investment nerds like us are also, well, investment nerds who are more likely to want to see how their portfolios are doing.
Here, too, no distinction is made between passive and mischievous active investors. Despite some friction at times, we try to be a broad church.
maybe most of equipment accumulator he just smiled serenely at the polls and then scrolled down to the latest guardian roundup of the luxury house in the weekly links?
Certainly my friends who invest completely passively (and I’ve had something to do with that, which is what I know) usually have no idea what their portfolio is worth.
At least a couple have called me over the years to make sense of their platform’s online browsing. Until then almost everything had been done by mail!
Who does that now? To some extent, the accessibility of our portfolios through the devices around us makes checking them regularly almost unavoidable.
checkmate
If I were to call someone for a snapshot, let alone wait for an email response, I doubt anyone would be checking something very often.
But then again, I would never have invested so much and so young if it hadn’t been hands-on experience. And obviously I’m an (over)committed investor as a result who has achieved a measure of financial security quite young as a result.
I’m sure I’ve invested more (and more often) because I check my portfolio at least daily. In fact, much more often sometimes, since it’s so easily accessible through multiple sheets in my Google Drive net worth worksheet
However, I also believe that this has caused me more stress and pain than even active investing. Particularly in a terrible year like 2022 (terrible at least for a naughty active small-cap/growth-inclined stock investor like me).
Tools of the trade(s)
I’m almost more surprised that so few of you use an automatically updated spreadsheet like I do. Our second survey suggests that almost 40% of you are scrolling through broker screens, which seems like a mistake to me:
One thing is clear: paper is, in fact, a dying medium for investors.
In the meantime, I’m impressed that about 350 of you don’t control your portfolio at all. Is it because its size exceeds the requirements or because it’s just getting started I wonder?
It feels like a definition of being really rich: if you have to ask the price, you’re not rich. Maybe it’s the same for sufficiently funded stashes (eight figures?).
I’ll let you know if I ever get there…
Pros and cons of portfolio monitoring
It’s been a truism for as long as I’ve blogged about personal finance that a mostly hands-off approach to your portfolio will work best for most investors.
Choose a solid asset allocation, automate your savings and investments, and avoid reviewing things too often.
There was even that famous study that apparently showed that dead investors, who couldn’t log into their dormant accounts to meddle, achieved the highest returns of all.
Interestingly, when reading about the subject I have found new research which implies that being engaged leads to superior results. Although of course, it depends on what that commitment entails.
Trading penny stocks based on candlestick charts every morning is surely not going to be a winning strategy, no matter how committed you are.
On the other hand, caring enough to log into your company’s pension portal to trade high-cost active funds for low-cost index trackers is a one-time decision that will likely reap rewards for decades.
In general, I still feel that less is probably more. As bad as it is to follow those tips.
This is because staying strategically disconnected from your portfolio value most of the time has two big benefits.
First, you’ll be less tempted to play with your plan or panic.
Second, all the portfolios except Bernie Madoff’s spend most of their time below their latest high. Seeing that you are depressed (even if only yesterday) makes you feel bad.
Science says that the times you realize you’re awake won’t balance it either. The pain of losses outweighs the joy of gains.
But you probably already know that. And I have to admit, as a passionate investor who follows the markets like other football players, not to mention a blog owner who hopes you’ll keep coming back or better yet subscribe to read more of our articles, I’m glad to may many of you be. So cool with your investments.
Just don’t tell the other guy!
Have a great weekend.
From Monevator
Are you lost in Neverland? Fear of investing is a familiar and expensive story – Monevator
From the archive-ator: When to buy insurance – Monevator
News
Note: Some links are Google search results; in PC/desktop view, click to read the article. Try privacy/incognito mode to avoid cookies. Consider subscribing to sites you visit frequently.
UK inflation fell slightly to 10.5% in December… – Investment Week
…and energy bills are forecast to continue to fall later this year – AM city
Employers confronted by lack of retirement contributions [Search result] – FOOT
Just two weeks to go until the January 31 tax self-assessment deadline: LITRG
Lloyds and Halifax to close 40 more bank branches in England and Wales guardian
The changes in the supplements of state pensions come into force from April – Which
Amazon is shutting down its AmazonSmile charity initiative Amazon
Super passive goes ballistic; active is appalling [Search result] – FOOT
Products and services
Hargreaves Lansdown launches electronic voting system – Investment Week
Could your savings earn a higher interest rate without changing banks? – this is money
UK inflation: how prices for everyday goods and services have skyrocketed guardian
Open a SIPP with Interactive Investor and pay no SIPP fees for six months. Terms apply – Interactive Inverter
How to earn rewards and gifts from your current account – Be smart with your cash
The Psychology of Scams: How Scammers Dupe Their Victims Which
The cost of a basic funeral falls below £4,000 – this is money
Homes with storage to clear clutter, in pictures: guardian
comment and opinion
$1 trillion and counting: Jack Bogle’s legacy to investors The evidence-based investor
Raise – banker on fire
Financial planning in your 20s is all about establishing good habits: outside investor
FOMO: the worst financial trait – house morgan
Five lessons from a terrible year for financial markets: A wealth of common sense
Don’t bet the bank humble dollar
The role of [US] real estate in an investment portfolio – Morning Star
Don’t buy a football club the motley fool
Who pays for your credit card rewards? [US but relevant] – vox
Long Term Investing Math Mini-Special
The most important equation (or why Bitcoin has to average 30% per year to break even with the S&P 500): Klement on investment
Long-term victories – A wealth of common sense
Naughty Corner: Active Shenanigans
The Periodic Table of Commodity Yields: 2013-2022 [Infographic] – Visual Capitalist
Is it time to buy UK small cap stocks? [Search result] – FOOT
Why do hedge funds prefer higher interest rates? institutional investor
Should we listen to the best performing fund managers? – behavioral reversal
Warren Road – humble dollar
Questioning the illiquidity premium – Trust Wealth Partners [h/t Abnormal Returns]
Kindle Book Deals
What should I do with my life? by Po Bronson £0.99 on Kindle
The Investment Trust Manual 2023 by Jonathan Davis et al – Free on Kindle
Stuffocation: live more with less by James Wallman £0.99 on Kindle
Reality: 10 reasons… why things are better than you think by Hans Rosling £0.99 on Kindle
environmental factors
It’s too hot to make snow cabling
Invest in technology that eliminates CO2, says UN report BBC
EVs: mini power stations on wheels – cabling
‘Super tipping points’ could trigger a cascade of climate progress: guardian
out of our rhythm
what is to be @Joseph in instagram – Board
Why can’t the US and UK stop fighting the metric system? the edge
“The more we pulled back the carpet, the more we saw” – guardian
Job interviews are a nightmare and it only gets worse. vox
And finally…
“I created the impression that it was good to let money be my slave and not make myself a slave to money…”.
–John D Rockefeller, Titan: The Life of John D. Rockefeller, Sr.
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