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TWO MONTHS AGO, I fessed up to my addiction to financial market news. Despite knowing better, I’ve followed the markets closely for years and would update my portfolio almost daily. Based on some comments my article received, it appears I’m not alone.
In the article, I vowed not to check my portfolio until New Year’s Day 2022. How’s my experiment gone thus far—and what have I learned?
My attempt to go cold turkey hasn’t been entirely successful. Though I’ve looked at my portfolio far less often, curiosity sometimes gets the better of me. Over the past two months, I’ve checked in on the market or my portfolio a handful of times. Still, compared to my old ways, I count this as a small victory.
One thing I discovered is just how addictive financial market data can be. Kicking the habit has been far more difficult than I’d imagined. Some days, I felt an intense craving for market quotes that were just a few keystrokes away. Usually, though not always, I managed to fight the urge.
Another revelation—perhaps obvious in hindsight—is just how difficult it is to insulate oneself from market data. Both The Wall Street Journal and Bloomberg have an electronic “ticker tape” displayed prominently across their websites. Even HumbleDollar recently implemented this feature on its homepage, displaying daily price changes for a dozen exchange-traded index funds representing broad market segments. I felt like a smoker trying to quit but being bombarded by images of cigarettes dancing across my computer screen.
By the way, if anyone working for these news outlets is reading this, may I offer a suggestion? Allow subscribers to opt out of seeing dynamic market quotes. Unfortunately, I have a sneaking suspicion that such feeds drive user addiction—I mean, engagement.
With regard to checking my portfolio, I resorted to a financial hack that’s been somewhat effective. I set up alerts for every position I own. Fortunately, my portfolio is pretty simple. I would be notified if any holding increased or decreased by 10% in price, or reached a new 52-week high or low. No alerts meant that nothing earth-shattering was going on.
I’ve received just a handful of alerts over the past two months. Two bond funds hit 52-week lows. A stock fund hit a 52-week high. Finally, a gold-mining ETF broke above the 10% threshold I’d set.
How many of these alerts did I act upon? Exactly zero. A waste of time, perhaps. But for me, the alerts provided a measure of reassurance that my portfolio hadn’t gone completely off the rails.
Overall, spending less time fussing over market noise provided me with greater equanimity. While I’m disappointed that I haven’t been able to break the habit completely, I’m determined to beat this addiction one way or another. Stay tuned.
Dr. Lim was kind enough to refer to his article ‘What a Drag’ in which he calculates the real cost of asset management fee. I have also done such calculations and agree with him completely.
The ease of information today has caused a huge decrease in “Puttering” – fixing things around the compound. Why? We have all become addicted to the electronic age. Just one more click before bed, a quick text message. So John, whats the cure? There is none! The only way “Puttering” is re established comes about when the emergency happens- the garbage disposal quits, the 1992 Acura only emits a click when the ignition key is twisted, and the better half advises “we need a new one”. So yes it’s a great experiment to stay away from the noise of finances, stock quotes, and such, but we have all become addicted to the next click. Thanks again for all your great articles.
I check my portfolio very frequently, if not every day because I want to make sure nobody has hacked my account. Perhaps I can avoid checking my portfolio frequently by setting up alerts as Dr. Lim has done. I was always interested in financial markets, because I grew up very poor in one of the poorest villages in India. My parents were not educated, but they made sure that I get a good education. I came to the US in 1969 as a college student and I graduated with as Ph. D. in Engineering. That gave me a sound background in mathematics and that helped me very much in my investment activities.
One thing I learned early on was that using an asset manager, who charges a fee as a percentage of assets is a losing proposition. I consider one percent fee which most asset managers charge is very high. Vanguard has one of the lowest asset management fee of 0.3 percent which I consider too high also. So I do not use any asset manger. But I am worried about what will happen after my death. My wife has no interest in investments even though she is an M.D. and earned a lot of money while she was practicing. I am hoping that my son who is an MBA might be of help.
I read many books and articles on investment by such giants as John Bogle, Burton Malkiel, William Friedman, Charles Ellis, Jonathan Clements and others. I consider myself very lucky that after 20 years since my wife and I retired our net worth is considerably higher than when we both retired.
Almost all of my investments are in index funds with Vanguard. I never sell anything and I keep enough in cash, short term bond funds and inflation indexed bond funds for our cash needs.
T. V. Narayanan
Thank you for your comments, Dr. Narayanan. I am in total agreement with you on the subject of fees. A prior article of mine may interest you:
https://humbledollar.com/2021/06/what-a-drag/
I share your concern about who will handle the family finances after my death. Perhaps I’ll write about it someday.
And congratulations on your financial success in retirement.
As a life-long member of a family of addicts who battle one addiction or another, I could offer boatloads of advise, but I’ll keep it simple: Find something worthwhile and healthy (for you) to throw yourself into, and go for it. All that creative energy needs and *will* find an outlet, and it’s up to you to channel it in a creative and beneficial direction.
And it’s OK to sneak a peek occasionally; don’t beat yourself up for this, you’ve done a good job with your portfolio, and it’s all right to remind yourself every now and then. Striving for absolutes as a goal in and of themselves rarely accomplishes anything long-term positive for an obsessive personality, at least in my experience. Learn to loosen the grip a little, even laugh at yourself from time to time, and you and those around you will be much better off for it.
As an alternate hobby/distraction, might I suggest exploring genealogy? The same analytical skills that I commonly use when doing investment research are also required when doing family history research. A subscription to Ancestry.com is a cheap hobby, and it has mercifully distracted me (and helped save me from myself – ie – my occasional proclivity for over-thinking and over-reacting in the market). It also makes for some fun conversations with siblings at family gatherings. Who knew that our 7th Great grandfather signed the Declaration of Independence?
Thank you for your sage advice.
John (and Richard, who mentioned similar), do you really update your portfolio DAILY!? I have no illusion that I’m the typical “buy and hold” investor. I’m that way simply because I’m inattentive. I suppose it’s a psychological thing, in my 25+ year investing career I’ve never really been tempted to be that interventional, maybe it’s a combination of work/kids/etc. that kept me from always keeping a hand on the tiller. But as you wrote, it is more or less the recommended long-term strategy, and by good misfortune it’s worked for me, and for that matter anyone else who’s been in the market in the past 30 years. But if we’re sharing mea culpas, mine would be a tendency to sit on too much cash in what seems (to me) to be an always-rising market. I’m sure there are marginal gains I’ve lost on for trying to wait for a dip.
Your benign neglect is the winning approach, as studies have born out. Perhaps it’s one of the curses of being a finance aficionado.
I am retired, but I am still an active investor. I still purchase stock every month. So I need to keep track of what is going on in the market to see what opportunities might be available, but I don’t go crazy. The kinds of stocks I buy do not play a big role in the financial news – they’re looking for excitement.
I’m still impressed Dr. Lim. I feel so lucky so have been late to the game age-wise that all I’ve ever known is an ethical CFP, Bogle, Ellis, Clements, Seawright, Housel, plus all of you all to steer me straight from the jump. I can’t imagine trying to make that change. I tell myself that my late start isn’t a bad thing b/c I woulda just screwed it all up stock picking in my 20’s.
Supposed Chinese proverb: “The best time to plant a tree was 20 years ago. The second best time is now.”
Give in to the dark side. I have. I have fun telling my wife we lost $10,000 today or we made $11,000 today.
Never mind checking every day, I’m on a three hour schedule. What else does a retiree have to do? 🤑
Funny. But honestly, the days I ignore the market seem more tranquil to me. Perhaps it’s my constitution; I lean anxious.
Mr. Quinn I need to work on my ability to make those reports funny to my wife. She doesn’t see the humor yet…