It is such and up and down market that we are currently in. One day your stock might be up 10 points and then next down 8. With all this movement, should one even bother worry over day to day activities? Better yet, if your time frame started out longer term, then can you prevent yourself from checking day to day?
Some people may debate that the notion of ignoring your investments is financially irreponsible; however, my rebuttal states that a wise investment should be able to bloom on its own under YOUR terms.
I have repeated several times that a clear entry and exit plan should be made before taking a position. What happens in between is basically unpredictable, so why should I let that plague me in a market that fluctuates too much.
Monitor the Amount of “Ignore-ocity”
If my time frame for a target is 3 months, then maybe I can follow up on it once a week. This is just to make sure something completely terrible didn’t happen.
At the same time, one of the main reason why I push not following day to day activities in this market is because the factors are too unpredictable. One day oil rises and the next it plunges. This stays the same for many of the stocks.
Unless you are some sort of physic it is almost impossible to perfectly jump in and out of a stock, although it seems pretty easy to buy and sell in the opposite direction (and your not shorting).
Save Yourself from Stress and Loss
It is programmed into almost everybody to panic at the sight of a declining account. While I worked at a financial advising office, I couldn’t tell you how many times people would call on down days in the market.
Most of these people’s first reaction was to sell sell; however, the adviser was calm in letting them know things would turn around.
One of the traps many people fall into is selling on first sign off loss (thinking they can get back in on the rise). Suddenly they miss the initial push upwards, they think the worse is over, and they proceed to buy. Almost instantly is seems like the stock heads back downwards.
Instead of being patient and riding the waves, you are riding the peaks and selling in the hole. Now you just exponentially made the market even worse for yourself.
Stay Alert
Much of trading is about learning how the society is reacting to events. In some markets, when a stock is heading downwards then maybe there is something wrong. The opposite can be said too.
In this market, a little up and down seems to be the norm. Who is to say you can predict the bottom? What if you let your stocks run blind for some time? Perhaps you will be less stressed out and even potentially make more money in the long run.
What do you think? Do you feel better knowing how your stocks are doing every day. Even if they are closed in the red?