How often do you check? Daily? Weekly? Annually?
Two investors usually held in high esteem, namely Warren Buffett and Charlie Munger, advocate not checking the market often, as they feel it encourages too much trading. Getting caught up in any frenzy, buying or selling, is painted as detrimental to one’s financial condition.
It’s a great piece of advice. If we lived in a world where separation from current events was simple, easy, and the norm, it would a no-brainer to avoid stock market news. But the world we live is a fast-paced news-consuming culture. Avoiding stock market news is like trying to avoid weather forecasts.
Quo Vadis?
I’ll be the first to admit my humanity. When the market is open, i check the trends. I like to think I don’t buy haphazardly. If the market is down, I consider buying. I check the prices of the stocks in my portfolio. If any are near my target prices, I might pull the trigger.
As my goal is dividend income, buying more when prices are low is an effective way to additional income. Lower prices means that my dividends will buy more reinvested shares, which later leads to more dividend income. Each purchase and each dividend reinvestment propels my income higher. What’s not to like?
Listening and Hearing
I think it unrealistic to expect people to avoid stock market news. What is a better proposition, in my view, is to train oneself to be aware but not react in panic or manic fashion. It is hard to buck the crowd when it everyone seems to have the same consensus, but that is when people show who they really are. Our character shines when we act independently.
Bragging, gossiping, rumoring, and so on, are all the death of the thoughtful person, and harmful to one’s character, Needless to say, they are also a negative influence on one’s financial well-being. Only a person who is concerned with the opinions of others engages in such activities.
Keeping My Own Counsel
While it is easy to find a negative opinion about anything if you look enough, I don’t find it helpful to debate stocks (or anything else) on social media. I may not have bought some stock at the lowest point possible. I can live with my decisions. Over time, I have put more emphasis on my income, rather than on my net worth. As a result, I no longer solicit the opinion of others when to comes to buying stock.
Perhaps my situation is such that I rarely seek additional companies to invest in. While the universe of investable stocks is seemingly endless, I am much more focused on which, if any, of my current holdings to add to. Variety and diversification allow me to understand that within any subset of stocks, a few will be hitting highs, others will be hitting lows. They scatter and rotate movement, and the process continues. It is my goal to identify which ones I might add to at any particular time.
How do you respond to market movements? Let me know here.
Illustrated is the title page of “Acerca de la materia medicinal, y de los venenos mortiferos” a 1563 Spanish translation of Pedanius Dioscorides’ ancient Greek five-volume on medicine. Courtesy Real Jardín Botánico, CSIC (Spanish National Research Council). Dioscorides’ writings, according to Wikipedia, were “widely read for more than 1,500 years. For almost two millennia Dioscorides was regarded as the most prominent writer on plants and plant drugs.”
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