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Chuck Jaffe: How Long Can You Go Without Looking At Your Portfolio?
I’m reminded of Patrick Henry’s “I have but one lamp by which my feet are guided”. That is that I want to be as disconnected from the major indexes as possible. I take roughly 30 seconds most weekdays to pull-up my financial app and compare my portfolio’s daily change with some other barometers. Up / down matters little. What I want (at 20+ years into retirement) is low volatility. Friday was a pretty typical day. My portfolio lost 0.03%. (That’s a bit overstated because it doesn’t include interest/dividends which accrue daily on many holdings.).
* My combined split benchmark = 50% TRRIX and 50% RPSIX
Readers will note from the benchmark that aspirations for growth are very subdued. Hey - I’m 72 and have already lived longer than I deserved based on earlier lifestyle. Why push the envelope and reach for return?
I use a great (subscription based) app from Apple. Takes one-click and 30 seconds (or less) to view the relative daily volatility. Aside from that one measure, I could care less. Might spot-check YTD (at Lipper) on 5 or 6 funds once every month or so - purely out of curiosity.
Disclaimer: I am not qualified to give investment advice. I make no recommendations to others. One size does not fit all.
About 3 or 4 days a week I spend about 4 minutes checking my investments. Sometimes it's less. Once a month I spend as much as an hour. It's not because I feel compelled. It's because it's fun!
The quarterly reports are just fine for me. Of course some exceptions do exist that drive me to a more frequent examination, but these are very rare events. The following reference paper provides some insightful, valuable and conclusive observations based on extensive data:
Indeed frequent trading can be, and often is harmful to end wealth. Study after study developes the same nasty outcome. As in many other instances, less is better than more. Frequent looking encourages frequent action. All too often, that's a Loser's game.
@MJG - Would you care to support that statement with some dicumentation?
A child could see through your screen here. You address a thread about “looking”. You link a study about frequent trading. Than you conclude that: looking = trading ... - and expect us to accept that.
That makes about as much sense as claiming that by looking at an attractive woman I’m more inclined to sexually assault women.
It’s interesting that in @Ted’s linked article, Jaffe pays only minor attention to the question of looking / not looking. He doesn’t use a portfolio tracker at all. He doesn’t think about his investments. He is apparently the epitome of a long term buy and hold investor. And, that’s the thrust of his article: Buy for the long term. Don’t be distracted by market gyrations. (And they all lived happily ever after ...)
OK - But Jaffe writes nearly constantly about investing. He is hardly a detached observer. And, compared to the vast majority of us here he’s probably a virtual encyclopedia on not only market indexes, but also the funds in which he invests.
I’ll stop short of calling that hypocritical. But do know (and realize) that his position is unique and that, in any case, he points to no harms from looking at one’s portfolio.
I'll go out on a limb and suggest that if a person is not disciplined enough to 'stick to their plan' or withstand the normal ups/downs of the markets, then absolutely if they check their portfolios frequently and see they're down 1, 2, 3 percent, they'll probably panic and sell out of positions versus letting TIME do its thing. Of course, that level of patience and discipline is not something one easily learns and I suspect many 'retail' investors are more inclined to panic first, sell, and buy back soonafter, thus churning their accounts needlessly. You can be down 3% one day and up 4% the next day at the moment, remember.
During the GFC I was in my mid-30s and holding an extremely healthy 'long-long-long' term portfolio. I think during that entire time I made 5-6 trades to trim (but not eliminate) positions and reallocate into stuff that went on-sale. I think I only sold 2 mutual funds outright b/c there was some overlap elsewhere.
But even us who can be patient and disciplined can make goofy decisions. In my father's account that I was managing, I sold out of a bunch of bank preferreds near the bottom in early '09 for a modest cap loss -- in retrospect I should have left well enough alone, but at the time I did not trust anything in the banking sector ... and still don't, actually.
More recently I took a small position in MIC just before it tanked 30% on a div cut and management weirdness. I still hold it, and it's chugging along okay enough .. and as long as it keeps paying its dividend, I'll let it accrue and reinvest until I have a compelling reason to dump it.
@MJG - Would you care to support that statement with some dicumentation?
A child could see through your screen here. You address a thread about “looking”. You link a study about frequent trading. Than you conclude that: looking = trading ... - and expect us to accept that.
That makes about as much sense as claiming that by looking at an attractive woman I’m more inclined to sexually assault women.
You gotta be really disciplined to sit tight when things are going against your hopes.
Speak for yourself. (I would not have objected had MJG addressed this from his personal perspective as you did. Instead, he linked a study about the hazards of frequent trading.)
Personally I have a template divided into sub-groups (ie: diversified income, real assets, equitiy growth, etc.). The allowable ranges are generous (much in the way an allocation fund lays out the acceptable limits). So rarely do I need to change anything. However, since my distributions come directly from the total investment pool (not from a separate cash account) it can sometimes be a bit challenging pulling out money (especially for a big-ticket item) without altering the percentages.
I don’t know anyone personally for whom “looking” is a problem. To the contrary, I know / have known several who never look, don’t seem to care, possess very little knowledge, and are headed for real trouble in retirement.
I look at and take action from time to time on those assets in individual stocks, MFs, and ETFS that I manage myself. However, my retirement portfolio I touch only after consulting with my TIAA advisor, usually once per year. I could look at the latter daily, but don't; the other positions I monitor M-F because it's one of my hobbies. I'm aware of the contradictions and absurdities of my situation. If you asked me if I was a long-term investor, I'd say yes, but that I check on Asian markets and futures early every day. I've been doing this for more than 25 years, so I guess it is for the long term.
I really do believe that frequent portfolio looking encourages frequent action. And that action all too often subtracts from long term realized returns. But that's not just me making some far out claim or assumption. Much research and many market wizards support that position too. Here is a Link to one such summary study:
Looking often at your portfolio does indeed influence trading frequency and contributes to investing underperformance. One statement from the referenced report is worth repeating here:
"Investing is a rare case of generally earning more by working and stressing less. Rather than work against that, take advantage of it, and take a vacation from monitoring your portfolio."
In the long haul, markets deliver positive returns. That assertion can not be made for the short haul.
“I really do believe that frequent portfolio looking encourages frequent action.”
Thanks @MJG for responding - and in a civil manner. If you (and others) want to accept that notion you’re entitled to your opinion. I’m sure that in your own case(s) it’s the correct answer. And an extensive Google search turns up only opinion-after-opinion that checking frequently leads to unwise decisions - but, curiously, not a single scientific study (or testimonial) that I can find confirming that widely held perception.
Where I have some issue is in passing that notion off as gospel to others. In fact, it strikes me as very similar to religion. An awfully lot of folks believe in it and live according to its precepts. Yet it’s impossible to “prove” by known scientific methods.
I’ll continue to look at my ipad’s portfolio app whenever I feel so inclined. As one who often devotes an hour out of the day reading / contributing to this board, what’s an extra 30-seconds? l will say that it strikes me as a bit absurd the notion that someone plagued by FTA (frequent trading addiction) is going to kick his/her habit by not looking. If only life were that simple.
In my case there is no correlation between how many times a week I look and when I sell. It's just like looking at baseball scores. It's fun and involving. When I was 7 years old I was sooooo into knowing the latest numbers and rankings in both the National League and American League. My fave team was in the National League but I kept tabs on the other teams there *and* even in the other league. Each summer day I consulted the One Important Page of the local paper (when I could find one, as I lacked the coin to buy one). This did not encourage or precipitate any further action on my part. I wanted to know because I wanted to know. As a senior now, many decades later, my checking the state of my investments is very much the same.
Sometimes this has precipitated a buy.
Buy low/ sell high is of course the sensible approach. If I have contemplated buying shares of a particular fund — including shares of a fund I already own — how will I know the NAV has fallen to a level I consider "low" if I don't have a look? But, except for my first year of investing back in the previous century, I have never sold shares of a fund because of market fluctuations. I have sold because of changes in how the fund is run, because I needed money for something else, because a particular investment is no longer needed or appropriate, and in one instance because of how a fund manager was responding to a market dip. I cannot see a correlation between my selling and the few minutes spent most weekdays having a look at the "score". My initial buys were done after doing hours of research. After that I leave it to the fund manager to take action. S/he is far more qualified than I am.
Just checked out @MJG’s earlier linked study. https://www.betterment.com/resources/high-frequency-monitoring/. It was conducted by Betterment Investing and purports to show a relationship between frequency of logging in to the Betterment account website and success as an investor (The “superstar” investors logged in less often.)
First, Betterment commenced operations in 2010. That’s one year into the current ten-year bull market in equities. Those who stayed the course and remained invested in the most aggressive portfolios would be expected to have outperformed. However, that’s a very short time frame on which to base conclusions.
Second, It appears there’s a high probability many of those logins to Betterment’s site were related to changing investment goals or transferring funds. That’s much different than just checking your returns using M* or a portfolio app. In the case of Betterment logins may well signal some type of investment action initiated by the the client (exchange, purchase, sale, withdrawal, etc.) Whereas the simple act of accessing a portfolio tracker does not signal any action - just looking.
Third, Betterment markets to investors several different risk adjusted portfolios, charging between .25% and .50% annually to manage accounts.
Fourth, Betterment automatically rebalances portfolios. While rebalancing actions would in-fact constitute “trades” (among different asset classes), they would not not show up in the account login statistics Betterment is using to bolster its overall conclusions. Therefore, the extent of trading within individual accounts would be distorted towards the low side if only logins were counted.
Fifth, as a broker skimming a set percentage off investors’ assets, Betterment has a vested interest in encouraging clients to remain aggressively invested at all times (increasing its AUM more over time than would otherwise be the case).
Still, It’s an interesting study and the only one I’ve seen which even attempts to demonstrate a direct correlation between investor “looking” and net investment returns (flawed though it may be).
>> In my case there is no correlation between how many times a week I look and when I sell.
you would think (I would think) there has to be at least some correlation at some faint level if only because if you never looked at all presumably you would do nothing ever - ?
>> In my case there is no correlation between how many times a week I look and when I sell.
you would think (I would think) there has to be at least some correlation at some faint level if only because if you never looked at all presumably you would do nothing ever - ?
That is so. I had made a silly statement. What I meant to say was that looking often does not cause me to trade often. Thanks for pointing out the anomaly.
I took your original statement to mean you might look 10 times during one week and not sell. But during a different week you might look only once, but decide to sell at that time.
ie: The number of “looks” in a given week does not necessarily need to correspond with when a buy/sell decision is eventually made. Made perfect sense to me.
@Hank: your interpretation does correspond to how it is with me and it is part of what I meant to convey, but not all of it.
This was my original statement: "About 3 or 4 days a week I spend about 4 minutes checking my investments. Sometimes it's less. Once a month I spend as much as an hour. It's not because I feel compelled. It's because it's fun!"
Then later I made another longer statement in which I compared being aware of baseball scores as a kid, and how being aware of the state of funds in which I am invested or am considering an investment feels to be like the same sort of activity. The frequency of checking is for the pleasure of the experience. (I don't mean that finding I have paper losses is pleasurable but I do know that with a solid investment the numbers are liable to rise again in due course). Another thing I used to do as a kid was check the temperature on a thermometer outside a window in the front of the house. I might check it 5 times a day. It had nothing at all to do with taking subsequent action based on the temperature. I just liked knowing the temperature. Similarly the primary reason for checking my portfolio numbers is not so that I may take action. And the frequency of checking does not seem to cause me to take more actions.
I am busy with all sorts of things in my life. I also do not use any mobile device for email or internet. So I do not check the state of my investments daily. But if I wasn't busy I might check it daily in the early evening just for the sake of doing it.
Hello, Being an active retail investor I tabulate my portfolio's value on most market days. In this way I get a feel for what's moving and what's not. In addition, I update my market barometer weekly as I use it as an aid to help determine the better times to buy. Generally, I hold my positions for a good number of years with a few that I move in an out of as I feel warranted to tweak my equity allocation.
I can understand a passive investor looking at their stuff monthly or quarterly. But, investing is something that I enjoy and during my working years we opened our business most everyday except on holidays and weekends. With this, I open my investment shop most days except holidays and during the summer months where generally I take a gander weekly (reduced hours) but not as often as I do during the investing season (4th & 1st quarters). These are the two quarters that my portfolio has the stronger returns and where I generally make most of my money. However, I have found that stocks often go soft during the summer months and sometimes if the stars are aligned to my fancy, I'll do some buying as I did back in June (around the edges of course).
With investing what may be right for one might not be right for others. Do what you feel is best for yourself and discard a lot of what the talking heads preach. My late father taught me if you have not picked up on a trend by the time it's printed in the papers ... Well, son, you are to late getting to the party as the big money has already been made. This still pretty much still rings true today. This is why I watch my stuff closely looking for trends to put new money to work. And, at times letting some stuff go in the process. Although, the turnover ratio on some of my funds is pretty high and Morningstar estimates overall my mutual fund managers (on average) turn their positions every 24 months ... my average turnover computes to years.
By the way, turnover is the measure of how often an investor (or trader) buys and sells.
Thanks again for reading and replying to my post that referenced the Betterment study. You claim that their study is flawed, but don't directly identify the flaws. I don't deal with Betterment and make no assessment of their business model or the services that they provide.
I offered the Betterment study as a second reference to this discussion. My first reference, which you did not address, was a study conducted in the 1990s by university professors. It was extensive and made the same basic conclusions that Betterment offered. Over a rather long timeframe individual investor performance has not changed very much according to both studies.
The referenced papers are rather lengthy. So here is a segment of the conclusions from that first referenced study:
"Our most dramatic empirical evidence is provided by the 20 percent of households that trade most often. With average monthly turnover of in ex- cess of 20 percent, these households turn their common stock portfolios over more than twice annually. The gross returns earned by these high-turnover households are unremarkable, and their net returns are anemic."
The numerical data presented in the study support that conclusion. The numbers need not be repeated here. But their last statement in the report is a terrific summary: "Those who trade the most are hurt the most". Enough said!
You claim that their study is flawed, but don't directly identify the flaws.
@MJG - You’re somewhat correct. I posed five caveats re the Betterment study. Since the third addressed their business model, I’ll omit it here. Here are the other four caveats which you may consider to be “flaws” in the Betterment study:
First, Betterment commenced operations in 2010. That’s one year into the current ten-year bull market in equities. Those who stayed the course and remained invested in the most aggressive portfolios would be expected to have outperformed. However, that’s a very short time frame on which to base conclusions.
Second, It appears there’s a high probability many of those logins to Betterment’s site were related to changing investment goals or transferring funds. That’s much different than just checking your returns using M* or a portfolio app. In the case of Betterment logins may well signal some type of investment action initiated by the the client (exchange, purchase, sale, withdrawal, etc.) Whereas the simple act of accessing a portfolio tracker does not signal any action - just looking.
Fourth, Betterment automatically rebalances portfolios. While rebalancing actions would in-fact constitute “trades” (among different asset classes), they would not not show up in the account login statistics Betterment is using to bolster its overall conclusions. Therefore, the extent of trading within individual accounts would be distorted towards the low side if only logins were counted.
Fifth, as a broker skimming a set percentage off investors’ assets, Betterment has a vested interest in encouraging clients to remain aggressively invested at all times (increasing its AUM more over time than would otherwise be the case).
My first reference, which you did not address, was a study conducted in the 1990s by university professors.
MJG - I think the following excerpt you posted (from a 35-page chapter) pretty much sums up what the U of M professors were getting at.
"Our most dramatic empirical evidence is provided by the 20 percent of households that trade most often. With average monthly turnover of in excess of 20 percent, these households turn their common stock portfolios over more than twice annually. The gross returns earned by these high-turnover households are unremarkable, and their net returns are anemic."
I agree with those findings, except I’d put it the other way around. Frequent trading is often the symptom of an uninformed and undisciplined investor. Likely these people have the same failings when it comes to saving in general, managing debt and maintaining a household budget. But do note that the thread is not about frequent trading (touching). It’s about checking one’s portfolio (looking). I know of no other aspect of human existence where ignorance is considered bliss, where not knowing is preferable to knowing, where remaining unaware is preferable to observing. Not in medicine, not in engineering, not in caring for our loved ones.
Skeet, I'm the same way -- you said it perfectly!! (Though I do some research and place orders on the weekends when things are quiet, every now and then.)
But, investing is something that I enjoy and during my working years we opened our business most everyday except on holidays and weekends. With this, I open my investment shop most days except holidays and during the summer months where generally I take a gander weekly (reduced hours) but not as often as I do during the investing season (4th & 1st quarters).
With investing what may be right for one might not be right for others. Do what you feel is best for yourself and discard a lot of what the talking heads preach. My late father taught me if you have not picked up on a trend by the time it's printed in the papers ... Well, son, you are to late getting to the party as the big money has already been made.
Comments
" ... investors need to build portfolios they can stick with ... "
I might change the "portfolios" to "a strategy" but, I get it.
Good for him.
c
I’m reminded of Patrick Henry’s “I have but one lamp by which my feet are guided”. That is that I want to be as disconnected from the major indexes as possible. I take roughly 30 seconds most weekdays to pull-up my financial app and compare my portfolio’s daily change with some other barometers. Up / down matters little. What I want (at 20+ years into retirement) is low volatility. Friday was a pretty typical day. My portfolio lost 0.03%. (That’s a bit overstated because it doesn’t include interest/dividends which accrue daily on many holdings.).
Some other baramoters Friday:
TRBCX -1.13%
KCMTX -0.96%
DSENX -0.68%
VFINX -0.66%
TRRIX -0.06%
Split Benchmark* +0.01%
* My combined split benchmark = 50% TRRIX and 50% RPSIX
Readers will note from the benchmark that aspirations for growth are very subdued. Hey - I’m 72 and have already lived longer than I deserved based on earlier lifestyle. Why push the envelope and reach for return?
I use a great (subscription based) app from Apple. Takes one-click and 30 seconds (or less) to view the relative daily volatility. Aside from that one measure, I could care less. Might spot-check YTD (at Lipper) on 5 or 6 funds once every month or so - purely out of curiosity.
Disclaimer: I am not qualified to give investment advice. I make no recommendations to others. One size does not fit all.
I check it daily ... but I tweak it rarely.
The quarterly reports are just fine for me. Of course some exceptions do exist that drive me to a more frequent examination, but these are very rare events. The following reference paper provides some insightful, valuable and conclusive observations based on extensive data:
https://faculty.haas.berkeley.edu/odean/papers current versions/individual_investor_performance_final.pdf
Indeed frequent trading can be, and often is harmful to end wealth. Study after study developes the same nasty outcome. As in many other instances, less is better than more. Frequent looking encourages frequent action. All too often, that's a Loser's game.
Best Wishes
A child could see through your screen here. You address a thread about “looking”. You link a study about frequent trading. Than you conclude that: looking = trading ... - and expect us to accept that.
That makes about as much sense as claiming that by looking at an attractive woman I’m more inclined to sexually assault women.
OK - But Jaffe writes nearly constantly about investing. He is hardly a detached observer. And, compared to the vast majority of us here he’s probably a virtual encyclopedia on not only market indexes, but also the funds in which he invests.
I’ll stop short of calling that hypocritical. But do know (and realize) that his position is unique and that, in any case, he points to no harms from looking at one’s portfolio.
During the GFC I was in my mid-30s and holding an extremely healthy 'long-long-long' term portfolio. I think during that entire time I made 5-6 trades to trim (but not eliminate) positions and reallocate into stuff that went on-sale. I think I only sold 2 mutual funds outright b/c there was some overlap elsewhere.
But even us who can be patient and disciplined can make goofy decisions. In my father's account that I was managing, I sold out of a bunch of bank preferreds near the bottom in early '09 for a modest cap loss -- in retrospect I should have left well enough alone, but at the time I did not trust anything in the banking sector ... and still don't, actually.
More recently I took a small position in MIC just before it tanked 30% on a div cut and management weirdness. I still hold it, and it's chugging along okay enough .. and as long as it keeps paying its dividend, I'll let it accrue and reinvest until I have a compelling reason to dump it.
Sometimes the best action is no action.
>> Frequent looking encourages frequent action
You gotta be really disciplined to sit tight when things are going against your hopes.
Personally I have a template divided into sub-groups (ie: diversified income, real assets, equitiy growth, etc.). The allowable ranges are generous (much in the way an allocation fund lays out the acceptable limits). So rarely do I need to change anything. However, since my distributions come directly from the total investment pool (not from a separate cash account) it can sometimes be a bit challenging pulling out money (especially for a big-ticket item) without altering the percentages.
I don’t know anyone personally for whom “looking” is a problem. To the contrary, I know / have known several who never look, don’t seem to care, possess very little knowledge, and are headed for real trouble in retirement.
I really do believe that frequent portfolio looking encourages frequent action. And that action all too often subtracts from long term realized returns. But that's not just me making some far out claim or assumption. Much research and many market wizards support that position too. Here is a Link to one such summary study:
https://www.betterment.com/resources/high-frequency-monitoring/
Looking often at your portfolio does indeed influence trading frequency and contributes to investing underperformance. One statement from the referenced report is worth repeating here:
"Investing is a rare case of generally earning more by working and stressing less. Rather than work against that, take advantage of it, and take a vacation from monitoring your portfolio."
In the long haul, markets deliver positive returns. That assertion can not be made for the short haul.
Best Wishes
Thanks @MJG for responding - and in a civil manner. If you (and others) want to accept that notion you’re entitled to your opinion. I’m sure that in your own case(s) it’s the correct answer. And an extensive Google search turns up only opinion-after-opinion that checking frequently leads to unwise decisions - but, curiously, not a single scientific study (or testimonial) that I can find confirming that widely held perception.
Where I have some issue is in passing that notion off as gospel to others. In fact, it strikes me as very similar to religion. An awfully lot of folks believe in it and live according to its precepts. Yet it’s impossible to “prove” by known scientific methods.
I’ll continue to look at my ipad’s portfolio app whenever I feel so inclined. As one who often devotes an hour out of the day reading / contributing to this board, what’s an extra 30-seconds? l will say that it strikes me as a bit absurd the notion that someone plagued by FTA (frequent trading addiction) is going to kick his/her habit by not looking. If only life were that simple.
Thanks again for your reply.
Sometimes this has precipitated a buy.
Buy low/ sell high is of course the sensible approach. If I have contemplated buying shares of a particular fund — including shares of a fund I already own — how will I know the NAV has fallen to a level I consider "low" if I don't have a look? But, except for my first year of investing back in the previous century, I have never sold shares of a fund because of market fluctuations. I have sold because of changes in how the fund is run, because I needed money for something else, because a particular investment is no longer needed or appropriate, and in one instance because of how a fund manager was responding to a market dip. I cannot see a correlation between my selling and the few minutes spent most weekdays having a look at the "score". My initial buys were done after doing hours of research. After that I leave it to the fund manager to take action. S/he is far more qualified than I am.
About Betterment : https://www.investopedia.com/updates/betterment-review/
Some caveats here.
First, Betterment commenced operations in 2010. That’s one year into the current ten-year bull market in equities. Those who stayed the course and remained invested in the most aggressive portfolios would be expected to have outperformed. However, that’s a very short time frame on which to base conclusions.
Second, It appears there’s a high probability many of those logins to Betterment’s site were related to changing investment goals or transferring funds. That’s much different than just checking your returns using M* or a portfolio app. In the case of Betterment logins may well signal some type of investment action initiated by the the client (exchange, purchase, sale, withdrawal, etc.) Whereas the simple act of accessing a portfolio tracker does not signal any action - just looking.
Third, Betterment markets to investors several different risk adjusted portfolios, charging between .25% and .50% annually to manage accounts.
Fourth, Betterment automatically rebalances portfolios. While rebalancing actions would in-fact constitute “trades” (among different asset classes), they would not not show up in the account login statistics Betterment is using to bolster its overall conclusions. Therefore, the extent of trading within individual accounts would be distorted towards the low side if only logins were counted.
Fifth, as a broker skimming a set percentage off investors’ assets, Betterment has a vested interest in encouraging clients to remain aggressively invested at all times (increasing its AUM more over time than would otherwise be the case).
Still, It’s an interesting study and the only one I’ve seen which even attempts to demonstrate a direct correlation between investor “looking” and net investment returns (flawed though it may be).
>> In my case there is no correlation between how many times a week I look and when I sell.
you would think (I would think) there has to be at least some correlation at some faint level if only because if you never looked at all presumably you would do nothing ever - ?
I took your original statement to mean you might look 10 times during one week and not sell. But during a different week you might look only once, but decide to sell at that time.
ie: The number of “looks” in a given week does not necessarily need to correspond with when a buy/sell decision is eventually made. Made perfect sense to me.
your interpretation does correspond to how it is with me and it is part of what I meant to convey, but not all of it.
This was my original statement: "About 3 or 4 days a week I spend about 4 minutes checking my investments. Sometimes it's less. Once a month I spend as much as an hour. It's not because I feel compelled. It's because it's fun!"
Then later I made another longer statement in which I compared being aware of baseball scores as a kid, and how being aware of the state of funds in which I am invested or am considering an investment feels to be like the same sort of activity. The frequency of checking is for the pleasure of the experience. (I don't mean that finding I have paper losses is pleasurable but I do know that with a solid investment the numbers are liable to rise again in due course). Another thing I used to do as a kid was check the temperature on a thermometer outside a window in the front of the house. I might check it 5 times a day. It had nothing at all to do with taking subsequent action based on the temperature. I just liked knowing the temperature. Similarly the primary reason for checking my portfolio numbers is not so that I may take action. And the frequency of checking does not seem to cause me to take more actions.
I am busy with all sorts of things in my life. I also do not use any mobile device for email or internet. So I do not check the state of my investments daily. But if I wasn't busy I might check it daily in the early evening just for the sake of doing it.
I can understand a passive investor looking at their stuff monthly or quarterly. But, investing is something that I enjoy and during my working years we opened our business most everyday except on holidays and weekends. With this, I open my investment shop most days except holidays and during the summer months where generally I take a gander weekly (reduced hours) but not as often as I do during the investing season (4th & 1st quarters). These are the two quarters that my portfolio has the stronger returns and where I generally make most of my money. However, I have found that stocks often go soft during the summer months and sometimes if the stars are aligned to my fancy, I'll do some buying as I did back in June (around the edges of course).
With investing what may be right for one might not be right for others. Do what you feel is best for yourself and discard a lot of what the talking heads preach. My late father taught me if you have not picked up on a trend by the time it's printed in the papers ... Well, son, you are to late getting to the party as the big money has already been made. This still pretty much still rings true today. This is why I watch my stuff closely looking for trends to put new money to work. And, at times letting some stuff go in the process. Although, the turnover ratio on some of my funds is pretty high and Morningstar estimates overall my mutual fund managers (on average) turn their positions every 24 months ... my average turnover computes to years.
By the way, turnover is the measure of how often an investor (or trader) buys and sells.
Thanks again for reading and replying to my post that referenced the Betterment study. You claim that their study is flawed, but don't directly identify the flaws. I don't deal with Betterment and make no assessment of their business model or the services that they provide.
I offered the Betterment study as a second reference to this discussion. My first reference, which you did not address, was a study conducted in the 1990s by university professors. It was extensive and made the same basic conclusions that Betterment offered. Over a rather long timeframe individual investor performance has not changed very much according to both studies.
The referenced papers are rather lengthy. So here is a segment of the conclusions from that first referenced study:
"Our most dramatic empirical evidence is provided by the 20 percent of households that trade most often. With average monthly turnover of in ex- cess of 20 percent, these households turn their common stock portfolios over more than twice annually. The gross returns earned by these high-turnover households are unremarkable, and their net returns are anemic."
The numerical data presented in the study support that conclusion. The numbers need not be repeated here. But their last statement in the report is a terrific summary: "Those who trade the most are hurt the most". Enough said!
Best Wishes
Skeet, I'm the same way -- you said it perfectly!! (Though I do some research and place orders on the weekends when things are quiet, every now and then.)