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LIKE MANY RETIREES, I have a 401(k), a brokerage account and a couple of modest rollover IRAs, plus a small—very small—annuity purchased 35 years ago in my more naive days.
Unlike most retirees, I also have a pension. My pension and our Social Security benefits comprise the income that covers our ongoing spending.
Why then am I addicted to checking my investment performance every day? Ask me and I’ll know my 401(k) balance. In fact, on any given day, I can tell you my net worth. Wait, let me check the value of my house since yesterday. I view my Bloomberg Watchlist several times a day, triggering unjustified elation or depression.
What’s wrong with me? I fear I have a bit of Scrooge DNA.
Shares of my former employer’s stock make up a significant portion of my brokerage account. It’s an S&P 500 company, its share price moves very little and it has paid a dividend for more than 100 years. Still, I look every day and I react to each up and down. My wife says she’s tired of hearing about it. I have no intention of selling shares and the dividends are reinvested. I track each dividend payment to see how many new shares are acquired.
Do I need help? Is it just greed?
I admit I get a kick out of seeing my account balances grow. I view it as a measure of success—not the most important type of success, I acknowledge—but it is some measure of accomplishment.
I remember advising employees, “Don’t check your 401(k) every day. Just set it and forget it.” Is there a difference between looking at investments and trading every day? I’m not sure. If my wife and I were living off our investments, I’d be stressed out on a daily basis.
Any advice on my affliction?
I think the cure is a bear market. In a bull market you get the positive feedback and can look to rebalance by taking profits. In a bear market it is painful to see that you should have sold.
So, you like seeing your balance go up, and it sounds like you take no action when that happens. What will you do when it goes down? I spent a good part of my early retirement traveling, and didn’t look at my accounts for months. Saved me doing something stupid during the 2008 crash. At home I take a look once a month or so, to see if I need to rebalance. I take a serious look at whether I need to change my asset allocation or fund choice maybe once every three or four years.
I agree with the comment about not holding a lot of a single stock, especially if the same company pays your pension! Isn’t that advice Financial Planning 101?
Normally I would agree regarding holding employer stock, but as I mentioned that stock is a significant portion of brokerage account, but not so of total investments. In addition, the shares were all free to me as stock awards while working.
Rick’s right. Our community of HD writers knows many of the right answers, but we too are prone to bad behavior and biases. Maybe more so. We shouldn’t cast angst on ourselves for it.