Don’t be scared of your portfolio!

I was talking with a friend at church a few weeks ago and we got to talking a little about our retirement accounts.  He admitted that he was afraid to look at what his portfolio had done.  (He has a bit of exposure to equities.)  I doubt he’d be afraid to look at it if he knew that he was making money hand over fist.

I’m trying to get out of the investment advice business as far as what to put money in, because telling a lot of people about what you’re investing in is a recipe for discontent.

Nobody cares about my portfolio as much as I do.  So if I’m scared of how it’s doing, nobody’s watching it!  If I’m scared to take action, or at least get educated on how my investments are doing, I lose control of my retirement nest egg.  (Nobody cares about my retirement years as much as I do, either.)

If you’re portfolio is doing well, that’s great!  If you’re scared about assessing the damage it’s suffered, though, here are a few things to try.  (I don’t know which one’s best for you, so be sure to get your own personalized investment advice!)

  • Just look at it.  Look at the numbers.  If it’s above zero, you haven’t lost it all.  That’s better than it could be, right?  And it wasn’t that hard, was it?
  • Embrace dollar-cost averaging.  If your portfolio is down, and you feel based on your sources that a turnaround is in the cards, then take some solace in the fact that your fixed payment is buying more shares of whatever you’re buying.
  • Jump ship.  On the other hand, if your best information says that things are getting worse, look to what’s getting better, and invest in that.
  • Talk with someone you trust about it.  They might have a different view of why things are in the doldrums.  Or they might reinforce what you’re thinking.
  • Talk with someone who knows what’s going on.  There’s probably one or two people that really seem to know what’s going on in the economy.  They may share with you.
  • Go off the beaten path for information.  Gary North’s Reality Check is a good place to start, and it’s free.

Don’t be scared of your investment portfolio.  It might spit in your face, but it won’t kill you.

John Wedding

Husband. Father. Web publisher. Musician. John has blogged at Mighty Bargain Hunter since 2005, helping people to recognize the good deals in life.

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Comments

  1. My strategy for overcoming portfolio anxiety is to: (1) Look daily at overall market indicators (DOW, S&P 500, Nasdaq);(2) On days that all indicators are down, I will likely not look at my entire portfolio, but only those assets that I believe should move in a direction different from market indicators; and (3) on days that all market indicators go up, I will look at everything in my portfolio, to confirm that staying the course is the right plan of action. It works for me.

  2. Unless you're planning on retiring soon or have everything in one place, what's to be scared of? Things average out.

    And since this was talked about at church, it begs the question: who's hands are you in: the economy's or God's?

  3. I also look at my portfolio usually when the dow is up :)

  4. A true blue libertarian, my husband loves stuff like "Reality Check". We're signing up! Thanks for the link on this!

  5. I like your advice, but I prefer not to look at my investments at all whether the markets are up or down. I stick with my consistent dollar-cost averaging plan and invest a set amount every month across a well diversified basket of mutual funds.

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