There’s nothing wrong with checking your stocks frequently, as long as that looking doesn’t lead to action.
Despite having a very long-term view about his investing horizon, Fool co-founder David Gardner checks his stocks throughout the course of the day, always keeping score.
How often should you check your stocks? And how can people get over that emotional hurdle of getting anxious about earnings, fiscal cliffs, or whatever is in the news, and really trying to hold on to the best companies for generations?
“I think it’s all where you want to put your energy. We all have a finite storehouse of energy,” David said. “Let’s call it ‘attention units.’ Where are you going to spend your attention units over the course of a day, a week, or a month? For me, with my energy storehouse, I spend a fair number of attention units on business in the stock market. Therefore, every single weekday, I’m watching the market.
“Now, there’s a difference between my attention units that I’m spending and the actual actions that I take. It’s very similar to sports. I spend a lot of time following the North Carolina Tarheel basketball team or the Washington Redskins. I love following sports.
“It’s the same thing. Do I change my sports team? Do I trade? Do I constantly reallocate what I’m doing? No, not at all. I love the spectator sport of American and global business, and I love the numerical scoring that goes on every day for the 150 or so stocks that I have as active recommendations in Stock Advisor and Rule Breakers, and I always will, until I either lose energy or want to start spending my attention units somewhere else.
So check as often as you’d like, but don’t let that lead to constant tinkering, and don’t let it keep you up at night.
“I would suggest, regardless of how you want to spend your attention, you will do best as an investor if you don’t trade very often and if you spend a lot more time just thinking about other things besides the stock market,” David said. “My best investment decisions have been simply to hold in the face of either a big gain … or a big loss like Netflix had in 2012? Just persistently holding through those usually leads to better results than doing anything in the face of them.”
Click here to watch the full interview with David about his approach to investing.