Despite my best intentions I find my mind wondering at times if I should be doing something different with my investments. Perhaps it is the engineer in me that constantly wants to improve things or perhaps it is all the personal finance blogs and books I read that give me ideas.
Regardless of the source one of the single biggest enemies to your portfolio doing well is yourself. If investing was completely a numbers game it would be easy to do, but instead we have a market place where real people react to things with their emotions and that drives all the dips and peaks in the market on the day to day basis. Over the longer term there is a certain reward for companies that do well as value investors deem them worthy of their price.
So how do you keep on track and not fall victim to changing your investment plan constantly? You have two main options for defense: ignorance and keeping yourself busy.
Creating a selective ignorance around the financial market is actually a very good idea. You don’t really need to know everything that each company you own is doing every second of every day. So if you can limit yourself to checking out news only once a week you will find yourself with more time to do other things and you will sleep better not knowing every little thing about the market that just happened. Perhaps the only exception to this approach is if you are watching a stock for a specific buying opportunity, otherwise you really don’t need to check your portfolio’s performance on a daily basis.
The second method of defeating yourself consists of keeping yourself busy with other things. Some people find if they drive that restlessness towards something else it tends to go away. So when your mind if wandering try filing your papers or checking your bank to see if you can lower your fees or even spend some more time with the family.
In the end, you have to be honest with yourself and find what works for you. Each person is a bit different, so if you’ve got another idea I didn’t touch on please share with a comment.