Stop StressingFor some reason, Money Magazine sends me a free subscription. I’ve chosen not to complain. In the May edition, they asked investors, “In the past six months, how often have you looked at your investments?” 18% did so once a week. 22% did so once a day. This tells me something valuable: I need to invest in aspirin, blood pressure medication, and psychiatric hospitals.
I’m not against someone looking over their investments. In fact, I encourage it. Yet once a week is too often for most and daily is a bit obsessive (if you can be “a bit” obsessive). Traders do need to keep track of the market. They’re in and out of stocks, options, and futures on a continuous basis. But I rather doubt that 40% of the investing public falls into this category.
Then again, I’m not sure what troubles me more: having 40% of those surveyed checking once or more a week, or the 34% that said they couldn’t bear to look at all. I mean, come on…we’re experiencing the biggest financial crisis since the Great Depression and one-third of investors won’t even look at their statements?!
I’ve seen quite a few disastrous situations in my life. During these I’ve observed three types of people. The most common seem to be those who stand back wondering what’s happened and who’s going to do something about it. While not much of a help, at least they don’t hinder too much. They are analogous to those who refuse to look at their retirement savings to avoid acknowledging a problem.
Another type is a lot more active, running to and fro, but not knowing what it is they are supposed to be doing. Unless lucky, they tend to make the situation worse. At a minimum, they’re pretty noisy. These are like those investors who are logging on constantly to look over their portfolios.
The last type is really made of two groups. The first are those who actually know what to do; the second are those who listen to those who know what to do. I suggest you mimic this type when it comes to investing.
Take your time and consider how recent events have affected your plans for retirement, your children’s college savings, or your sustainable standard of living. If you never have done any financial planning, now is a great time to start. And once you figure out where you sit, you can calmly and deliberately create a plan of action to achieve your goals.
If you don’t know how to begin or you know you are not capable of doing this yourself, seek help. This could be a financial advisor, a knowledgeable family member, or a wise friend.
Don’t be like those who refuse to look at their statements thinking that somehow refusing to acknowledge the damage this recession is causing will make it go away. Likewise, don’t be like those who are online a couple times a day until they either curl up in a ball or throw a coffee cup through their computer screen.
Turning a blind eye toward the problem or running around shouting the sky is falling doesn’t lead to a financial goal…it leads to coronary arrest.
Gary Silverman, CFP® is the owner of Personal Money Planning, a financial planning and investment management firm located in Wichita Falls. You may e-mail him at Gary@PersonalMoneyPlanning.com
|