Warren Buffett doesn't have a computer on his desk. He buys stocks for the long run and he doesn't let short term stock prices impact his investing decisions. He advises investors "Don't watch the market closely" highlighting that when investors are "trying to buy and sell stocks, and worry when they go down a little bit - and think they should maybe sell them when they go up - they're not going to have very good results.To me this all depends on the psychology of each individual and
what they’re checking. Are you checking your annual return every day? Comparing how gold performed compared to equities on a major news day? Looking to see how correlated your portfolio is with the S&P or some other reference point? Wondering how domestic funds performed relative to internationals?
Some believe: Curiousity kills the cat. Others, like myself, discern no harm in being curious. I’m aware that study after study finds rough correlation between frequency of checking portfolios and poorer returns. But did the looking cause the poorer return? Just as likely I think - Investors with a tendency to trade more frequently
also display a tendency to monitor performance more often.
http://mastersinvest.com/newblog/2017/5/11/check-daily
Comments
The referenced article makes a strong case that indeed “curiosity kills the cat”. Many investing wizards are quoted in the article that support that position. In this instance, I am with these experts. The market up days only slightly exceed the down days. Keeping our fear of losing emotion under control is a difficult challenge, and checking often works up that negative emotion.
"You know, I think people’s investment would be more intelligent, you know, if stocks were quoted about once a year." That’s from Warren Buffett.
I actually check my portfolio several times a year so I violate Buffett’s observation just a little bit.
Best Wishes
Answer = No
Variable = Know thy self
In my earlier post I made a generic observation that equity market up days exceeded down day frequency. That’s merely a general comment that is not satisfactory. Here is a Link to specific data:
https://www.crestmontresearch.com/docs/Stock-Yo-Yo.pdf
The data are relatively constant over numerous timeframes. These data did surprise me. BobC asked a most important question: Are you an investor or a trader? Thank you BobC.
Best Wishes
Thanks for contributing to this thread. The only problem I had with your earlier post is that it appeared to distort @Crash’s intent in posting from what he wanted to discuss to what you wanted to discuss instead. Indeed, I suggested than that you or someone else start a separate thread on the topic you really seemed to care more about,
While I accept that you did not intend to critique / criticize @Crash or others who responded to his query, I, at least, took it that way. This board has a wide purview in terms of what fund topics posters may discuss. While you or I may choose not to participate in some threads, I think it’s important we not appear to be goring somebody else’s ox or passing judgement on their investing acumen. Obviously the question Crash posed pertained to mutual funds and was deemed important by him or he would not have proffered it.
I’m sorry if my response the other day was unnecessarily rude.
Regards, hank
With you on this..........and as I noted prior.....know thy self, eh?
Yes. There is nothing else to do. If there was we wouldn't talk about it all the time.
What I will often look at, however, are not my own holdings, but rather a tracking list of funds I don’t own: I feel it helps me stay in tune with the markets and to compare fund performance against the verbiage we hear from these managers or investment houses.
HSGFX - Because of an infamous manager (Hussman)
DSENX - Because of a well known manager / market prognistacor (Gundlatch)
KCMTX - Because its manager sometimes posts here.
OAKBX - Because I sold it within the past year.
VFINX - Because it closely tracks the S&P
PRHYX - Because it provides a glimpse into high yield bond performance
PRGMX - Because it reflects the government backed (high credit) bond market performance.
TRBCX - Because it represents one of the better high-octane funds from TRP. Shows how a lesser risk averse investor might have done.
Some might think that I'm being a micro manager ... but, it has worked well for me, thus far, through my close to sixty some years of investing. With this, I have no plans to change.
So ... author writing person ... write all the articles you wish on the subject and reference as many as you like to support your view along with, while your at it, don't forget to collect your writing fees.
Again, I have no plans to change.
In light of the great many reports out there from firms with a vested financial interest in retaining clients (not having them panic and leave in down markets), it’s worth taking a good look at all the studies being used to bolster the idea that not knowing how your investments are doing is somehow better for you than knowing.
Again, those that sell out in a down market just might not have the right asset allocation mix to stick with it. And, their risk tolerance might not be what they thought it was as it was set for goal achievement and not to their true level of risk. Expectations often times are just not realistic.
Old_Skeet said:
Hi @JoJo26: Now that I steped forward and responded to your question(s) ... How about you steping forward and detiling your expenses associated with your portfolio and positions held along with telling us how you invest. I'll make this an open ended question so feel free to respond accordingly. I'll be interested in hearing how your new school way compares to the old school way.
Although you commented on some of the active funds you hold and their expenses you never commented on the other funds you indicated you held. Therefore, based upon the scope of the question presented and your incomplete response ... I now have you on ignore.
I'm basically in line with it's premise on not reacting to day to day volatility. But like most people here responded, I enjoy keeping abreast on my portfolio movement, because as someone else mentioned, it is fun and it does give a feeling of understanding (whether that feeling is accurate or not).
For @BobC - I used to know someone who, back in the day, would wander into his broker's office to read the stock ticker, or so he later claimed.
When I was going to school a couple of decades ago, on my way home I'd use a payphone (remember them?) by the train tracks to call my broker's 800 number for end of day account balances. Just something to do to kill time while waiting.
In Silicon Valley, everyone knows that the market opens at 6:30AM and they are busy checking their company stock minute by minute. Doesn't seem to affect their productivity or their portfolios.
I agree with @MikeM's perspective. To put it another way, like technology, information is neutral. It depends on what you do with it.
Did you know that last week being opening week in baseball that Parker Binion's fund knocked it out of the park last week (so to speak)? KCMTX was up 3.2% for the rolling week through Monday.
You might want to check as to how the portfolio was last reported to be positioned at Morningstar (10/31/18). Interesting? Yes ... long stocks. Overweight in health care, technology and consumer cyclical.
I got my single for the week ... and, he hit a tripple. They must have been leveraged?
Wonder where he has it currently positioned? Any thoughts?
The below link will take you to the fund's home page at Kerns Capital Management. Then click on the fund's fact sheet (12/31/18). It will be interesting to see what is reflected in the fact sheet as of 3/31/19 when updated.
https://kernscapital.com/service/kcm-macro-trends-fund/
Morningstar reports it's turnover ratio at 534%. So, it is pretty active with its positioning in response to the forever chaning market currents.
A question ... "please" ... for the Genie. Where do I go next?
Answer ... Just buy the fund and get on board.
Skeet
Other than monitoring the performance of KCMTX on a watch-list of a dozen different types of funds, I have no particular insight into this one. I find it helpful to systematically compare my own defensively positioned portfolio’s performance against a few different types of funds. I’m intent on mitigating volatility while still outdistancing cash and bond type investments. For longer-term investors short-term volatility isn’t important; but if you’re deep into retirement and taking distributions from the pot regularly, than short-term volatility may be (or at least may seem to be) important to you.
Here’s their 2018 Report: http://kernscapital.com/wp-content/uploads/2018/08/KCM-Annual-4.30.2018-Final-1.pdf
- The report details the fund’s holdings and discusses its objectives, style and philosophy. Lacking, IMHO, is any substantive insights into: which sectors they currently favor, major buys / sells during the past year, or what they deem attractive / unattractive investments at the current time. Compared to other reports I’ve read, some managers say a lot less (PRPFX for example) and some others, like OAKBX or DODBX, say quite a lot more about what they’ve been doing tactically and where they intend to take the fund.
- If you’re looking for where leverage (or overweighting) might have worked last week it would be in the interest rate-sensitive areas, as rates fell sharply. This would include utilities, real estate and longer dated investment grade bonds. The fund had around 24% in utilities, according to their December 2018 report. And they held about 7% in basic materials and energy. The latter two have also been strong in recent weeks.
- Practically speaking, to an outsider these types of funds are all but impossible to understand when you try to look at the moving pieces. (They rightfully benchmark their fund against a hedge fund index.) I’d be a bit suspect about that “0%” short position M* lists. Doesn’t sound right based on the manager’s own description of how he invests - even allowing for December being a bad month. Looking over the 2018 Report I’m not able to tell what they hold short positions on.
- I’d never recommend a fund like this for those with long-term investment horizons. If you are in the later life capital preservation stage and are concerned about the macro view, than a small slice of one might help to dampen potential losses in uncertain markets. Like you, Ol’Skeet, I rejiggered my approach last year to account for advancing age. I began with a 15% allocation to alternatives (excluding gold), but quickly determined that to be too high and pulled it back to just 10%. All of that is in T. Rowe’s new TMSRX. I should note that TMSRX has much more modest aspirations than KCMTX. Price considers this hedge-like fund to be primarily an income-focused fund. I’d think RPSIX would be a good one to compare TMSRX with over time..
Happy investing.