There’s nothing wrong with checking your 401k every day…right?
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Since taking control of my finances I have developed an obsession with checking my investments every day, reading every article about retirement and investing that pops up on the Wall Street Journal website, and watching CNBC’s Squawk Box in the mornings as I get ready for work. Is this unhealthy? Are there other investment junkies like me out there? Are there support groups available? Is my husband planning the intervention?
Well I have decided it is okay to regularly check my portfolio and monitor the daily whims of the stock market…I just don’t ACT on any of the information. I stick to my program of regular investments in index funds. Plus, following the markets has given me a better understanding of the workings of our economy making me an informed citizen (I’m rationalizing I know).
Financial News outlets tune me into the impact of general news and politics on the markets and economy as a whole. I’ve been hearing about tax reform since the US election last year-is it priced into the market? Is reform necessary or just a handout for the rich political donors at the expense of the middle class? When it looked like tax reform might stall-the brief dip in the markets, especially small caps, made sense. I have an informed position in the debate on whether the current stock market boom due to the efforts of the current US president or the synchronized growth of all world economies (after all 40% of profits of S&P 500 companies come from overseas). One morning my company’s CEO was on Squawk Box which I was able to discuss later at work-helping me network. How can paying attention be bad?
I must admit I am sometimes tempted to trade on market news when some “Chief Economist” from “X” investment firm says he’s advising his clients to go to cash or to only invest in international markets that are relatively cheap compared to the US (though I do believe that a truly diversified portfolio of index funds should have some percentage of international and emerging markets). Or I’ll hear of some hot IPO that has the potential to be the next Google that I must invest in. But I stay strong…okay I cracked and bought a few shares of Roku with fun money…sue me.
My position is that it’s okay to check in on your investments and financial news media-just don’t panic when you see small drops in your account or try to trade on market news. Take the long term view and know you are passively investing for the long term. And take financial news as entertainment rather than financial advice.