Check That Obsession

Sat., Oct. 17, 1998

Brenda Buttner Thestreet.Com

OK, so how compulsive are you?

I’m asking about your willpower to fight a growing American obsession: checking on your mutual funds. How often do you scan the ticker, grab the biz section or click your mouse to see how much they’re up - or, as is the case these days, how much they’re down?

Probably too often.

Now, don’t get me wrong. I think it’s terrific that you so want to know, even if you cringe with each check. This is one of many signs that we small investors are taking taking our money matters seriously. Getting under the hood of your portfolio - monitoring your investments, understanding what makes them run and tuning them up if needed - is part of being a responsible investor.

Of course, it’s human nature to measure how you’re doing. But lately, we’ve treated our stocks and funds like sporting events, with the end of each day like the last minutes of a football game. We ask ourselves, did we make or lose money today?

Here’s the rub: When we answer that question, the time period in question is rarely the relevant one. The only return that really matters is the one measured from the day you bought a fund to the day you sold it. There’s nothing wrong, per se, with checking your fund’s progress, as long as you don’t act on that information recklessly.

I look at my mutual funds’ performance about once a quarter. I don’t just eye the plus or minus signs without putting them in context. I also spend time answering “why?” instead of just “how much?” Did the manager switch strategies? Did the top holdings change significantly? Did the cash allocation go up or down?

If you’re waking up each morning with the chart of yesterday’s market action seared to your eyelids, take a minute to remember who you are and who you are not. You are not a hedge fund manager or a stock trader trying to eke out gains by catching discrepancies on an hourly basis. Your bottom line does not depend on tomorrow’s trade; you can weather short-term, nonrealized losses because your time horizon is years away. (If it’s less than three years away, why are you in mutual funds anyway?) For you, it’s time, not timing, that will matter most.

Better to spend your time making sure you get into the right fund before you put your money there than checking its progress obsessively day by day.

Local journalism is essential.

Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are tax deductible.

Meet Our Journalists

Jesse Tinsley

Meet Jesse Tinsley. As a certified drone pilot, this veteran Spokesman-Review photographer often can be seen capturing beautiful aerial photographs of our region. Sometimes though, the job requires getting down with the dogs.
Jim Meehan

Jim Meehan is no stranger to Zag Nation. As the lead writer covering the Gonzaga men’s basketball team, he tells the stories behind the game and gets fans a bit closer to their favorite players.
Molly Quinn

There is no artist in Spokane like Molly Quinn. Her whimsical style is instantly recognizable to readers of The Spokesman-Review. She has painted gorgeous illustrations that instantly elevate the journalism accompanying it. She brings to life the stories that defy photography. She makes our pages better.
Rob Curley

Spokesman-Review editor Rob Curley loves to talk with people and learn about their lives, whether it's a best-selling author or a stranger he meets downtown on his walk to lunch. It's that inquisitive nature combined with a playful sense of storytelling that helps make our newspaper different than most.