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When I first started investing, my father-in-law, a longtime investor, gave me advice that echoes in my mind almost every day: “It is a business.”
At first, it sounded simple, maybe even boring. But the truth is, that advice has kept me from making a lot of mistakes. It runs contrary to the old adage, “Set it and forget it.” A business owner doesn’t forget their business. They know their numbers, track results, and adjust when circumstances change. Your portfolio deserves the same attention. After all, no one is more concerned with your financial future than you.
That doesn’t mean you have to do it all yourself. You can hire help—advisors, managers, planners—but remember what Jesus said about the hired hand: “The hired hand is not the shepherd and does not own the sheep. So when he sees the wolf coming, he abandons the sheep and runs away” (John 10:12-13). You can hire help, but you must oversee them.
Thinking of my portfolio as a business has shaped how I handle it:
• Strategy. Set goals, allocations, and a growth plan.
• Numbers. Track returns, dividends, and costs. Profit is what you keep after expenses.
• Risk management. Diversify like a business spreads risk across products.
• Growth. Reinvest dividends, stay educated, and focus on the long term.
Bad management can sink both businesses and portfolios, and I’ve been guilty of all of these mistakes: overtrading, overthinking, chasing fads, ignoring costs, obsessing over short-term swings, and neglecting periodic review. Activity without discipline is just noise.
The lesson is simple: manage your portfolio like the business you own. Show up, know your numbers, review your strategy, and oversee anyone you hire. You are the CEO of your financial future—and the success of your “company” depends on you.
I’m curious—how do you run your portfolio? Have you made any of the mistakes I’ve mentioned, or found strategies that work particularly well? Share your experiences—I’d love to hear what you as CEO of your company are doing with your financial “companies.”
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Great article, thanks.
In thinking about this topic, I tend to think that a degree of balance is required.
If someone takes no interest in their financial health, that is clearly a poor situation. But at the other extreme, analysing your portfolio daily, constantly making tweaks, trying to time the market etc. is also not a great situation.
I like that idea that several comments have suggested, to have a regular period for checking your portfolio and rebalancing as required.
I agree with your comment: “But at the other extreme, analysing your portfolio daily, constantly making tweaks, trying to time the market, etc. is also not a great situation.”
I would add: any of these are just bad business.
My goal, and I am getting closer, is 80% S&P 500 ETF like VOO and IVV. I am tired of bonds, and now do high interest rate web banks, like Ally and Marcus for my 20% cash. This cash is to tide me over, if I have negative years on the S&P 500. Simple, and over many years average about 10% gains. I am 80 and it is working for me. Remember Compounding helps YOU, while Inflation hurts you.
I dumped my Marcus in favor of Vanguard Federal Money Market Fund.