Cramer vs. Your Family

You clicked on this article today because you own stocks, care about the market, or otherwise enjoying surfing the Web when you don't have anything else to do at work.

But at what point does your time and attention to this world of investing cross the line from run-of-the-mill research to a time-draining nuisance, or worse, a performance disadvantage?

Why is my stock down 2%?!
If a real-time streaming ticker feed informs you that one of your holdings is down 2%, do you listen to the voice inside telling you that something is happening? Do you then go check in at the Yahoo! message boards?

Hey, it happens. And it's not your fault you care so much. Many people (including our intense, balding, tennis-elbowed friend referenced in the headline) will have you believe that you must be agile, mobile, and hostile to survive in this crazy market.

The media literally bombards you with this information. As evidence, just check out the number of articles bubbling up on Yahoo! Finance from stocks that just had an approximately 2% drop in the past month:

That's an average of 24 articles to sort through -- on one day, from one website! That's just way too much information. And this kind of data overload leads to really bad performance.

Sell, sell, sell
In a twisted sense, this is part of the whole excitement of investing. But it too often leads to the really neurotic behavior of which we're all occasionally guilty. (Can I get an amen from a BlackBerry fanatic?)

Before you wander off because you have to check another ticker, just humor me for a second and answer a few quick questions:

1. Do you check your portfolio several times a day to see whether anything's gone wrong?
2. Have you ever had to excuse yourself from a family or social event because something has gone wrong?
3. Do you drag your clunkster laptop with you on vacation because it's important to keep tabs on the SEC's investigation into Broadcom's (NASDAQ:BRCM) backdating issues?
4. In your heart, do you seriously think the Celtics have a chance of winning the NBA championship? (Good -- at least you're not totally irrational.)
5. Finally, do you really enjoy researching, staying alert, and being in the know?

If you answered "no" to No. 5 and "yes" to the others, something is probably wrong. Many of us, however, can answer yes to all of these questions (except for No. 4, of course) and still be fine. For example, I love the stock market -- it's my passion, and I really enjoy digging in and getting my hands dirty. If you're like that, bonus points for you -- I bet in your dreams, you sometimes see tickers floating around, right? Right?

I'm more concerned about everyone else out there.

Coffee, tea, or the SEC?
You probably know who you are already. Your ideal afternoon involves a set of golf clubs, a fine wine, or your cute little grandkids -- not 10-Ks, 10-Qs, Form 4s or Form 13-HRs.

That's where this phobic habit of checking up on your portfolio multiple times a day really hurts you. You don't like researching. You're doing it out of a sense of obligation to yourself, your family, whatever. And you're probably going to settle for the most painless solution to a problem.

Psychologically speaking, you're also likely to make some of the worst behavioral mistakes that investors make: following the herd, panic-selling, listening to horrible tips from your crazy brother-in-law who knows a guy in on some deal, and so forth.

It's hard enough to be good at investing while loving it. But attempting to succeed at it with a disdain for doing your homework all but ensures you bad returns. Beyond all that, this is time you could be spending doing other things that you actually enjoy.

Advice you can use
To alleviate many of these problems, here are two action steps:

1. Invest in a portfolio of stocks unlikely to require constant attention. These stocks have fantastic management teams who consider themselves stewards of your capital. Examine the management at Markel (NYSE:MKL) if you don't know what I mean. I own Markel -- and as a constant researcher, I'll feel comfortable refreshing myself in five years, and not reading a thing until then. That's what I mean.
2. Change your investment horizon to long-term. If you're waiting for your short position or options contract to come through in three weeks, and you're a Joe or Jane Oddlot investor, you're going to stress yourself out. Instead, stick your money with fantastic businesses like Walt Disney (NYSE:DIS) -- a stock I'd consider owning for life.

The Foolish bottom line
Lastly, you might conclude that stocks are just too much work, or that given the option, you'd stick with the stocks you do enjoy following, and sell the rest. Rather than putting this money in sleepy CDs, consider investing in some of the best mutual funds around.

Mutual funds are tricky. The vast majority underperform the general market, so you've got to find the right fund managers, and they've got to charge minimal fees (which otherwise cause much of the underperformance that investors experience).

If you need a Foolish guide, The Motley Fool's Champion Funds service has been finding the world's best funds for four years. Our average recommendation is leading the broader market by some 20 percentage points. A free 30-day trial gives you the best of all worlds: headache-free investing, minimal time with screaming cable gurus, and great returns.

Fool analyst Nick Kapur thankfully spends no time with Cramer, but he does own shares of Markel. Walt Disney is a Stock Advisor recommendation. Bank of America is an Income Investor recommendation. The Fool has a disclosure policy.