Checking on your portfolio every day can be agonizing. One day you’re up $1000 and the next you’re down $1000. Toss in the fact that experts estimate that we feel losses twice as intensely as we feel gains, and an oscillating portfolio can leave you depressed even if the daily gains tend to be a little bigger than the losses. I’ve found that a minor change to the way I view my portfolio makes a big difference to me.
I used to store my portfolio information on one of the free online services. It produced numerous statistics including the daily gain or loss in both dollar terms and percentage terms. In the last couple of years I’ve been using my own spreadsheet that does some extra calculations like telling me when it’s time to rebalance. Crucially, though, my spreadsheet does not report daily gains or losses. I only work out gains and losses roughly once per year.
To know whether I made or lost money during a given day or week, I’d have to remember a past portfolio value. My imperfect memory doesn’t allow me to do this with any reasonable accuracy. So, I no longer agonize over short-term gains and losses. I just check to see if rebalancing is necessary (which is rare) and occasionally adjust the portfolio for new money I’ve added.
I find this an interesting case where I’m happier and more likely to make good investing decisions because I have less information.