I was travelling for the past few days with my family, and the last thing on my mind was how my stocks were doing.
In fact, when I am on a holiday with my family, if you ask me my view on the stock market, you would receive a blank stare. During such periods, not only I don’t check how the markets or my stocks are doing, I don’t even remember that I own stocks. 🙂
But things were different in around 2007. Then, I checked prices of my stocks every day, even when I was on a holiday.
I have never traded in and out of stocks in my life, but I still caught this habit of “just checking” what my stocks were doing each trading day…in fact, several times each day.
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Having my portfolio on an online tracker also helped matters, as I thought seeing stock prices jump up and down gave me control over them!
But after selling off almost all my stocks before the 2008 crash – not due to any special foresights I had, but due to my need to prepay my home loan – and then seeing stock prices melt away, I deleted all my portfolio tracker accounts and have never looked at stocks prices daily ever since.
I saw a lot of my investor and trader friends getting sick (mentally and physically) after seeing ‘live’ their stock investments vanish into thin air, day after day.
Checking Stock Prices Daily Can Make You Sick
Did you check the stock market today? I’m sure you did.
But as you read this, you know deep within your heart that you probably didn’t need to look at your stock prices today.
And if you are yet to look at them, you know you can avoid doing that and it will not impact your life in any way.
Buffett says he doesn’t care if the stock market closed for 10 years. He doesn’t watch the market’s up and down movements from day to day. And he never loses sleep as an investor.
As long as he’s paid a fair or bargain price, and as long as the business he’s invested in hasn’t changed significantly, there’s no need to worry about the future, and no point worrying about the daily movement of stock prices.
In fact, as per a March 2013 study conducted by Joseph Engelberg and Christopher Parsons of the University of California, there exists a strong inverse link between daily stock returns and hospital admissions, particularly for psychological conditions such as anxiety, panic disorder, or major depression.
The authors wrote in their report…
Over roughly three decades, we provide evidence that daily fluctuations in stock prices has an almost immediate impact on the physical health of investors, with sharp price declines increasing hospitalization rates over the next two days.
The effect is particularly strong for conditions related to mental health such as anxiety, suggesting that concern over shocks to future, in addition to current, consumption influences an investor’s instantaneous perception of well being.
While the study found that a declining stock market makes people sick, I have seen people getting sick of even rising markets (like the one we are seeing now)!
Now, the causes of sickness when stock prices are rising are many –
- Jealousy of seeing others making more money faster, and/or
- Regret of not investing in stocks that have run up very fast, and/or
- Fear of correction in stock prices after you invest your money.
What is more interesting, in such times, people seek out information that is harmful not only to their investment health, but their physical health, regardless of how easy it is to obtain.
Being bombarded with market news all day may be bad, but checking how your stocks are performing daily is worse.
When you see red, you feel sick.
When you see green, you worry that the prices may fall soon to make you sick.
You also get sick seeing others making money faster than you.
Overall, it’s a bad thing to worry about what Mr. Market is doing on a daily basis. You won’t tolerate a moody, unstable friend like him, so why him?
One effective way you can do that i.e., stop looking at your stock prices daily, is by deleting all your online portfolio tracker accounts that show you live updates of your stock prices.
If you can have a stricter control on your emotions (which is often difficult), keep your online trackers but try to limit yourself to a once-a-week update. Once a month is just great!
“Mr. Market is there to serve you, not to guide you,” Ben Graham used to say.
Turn off business TV. Put down the business paper. Go for a walk or a holiday.
You and your family will be happier…and your stocks will be just fine. 🙂
Nice one vishal !!
This is eye opening for me. I definitely required to practice this.