First Time investor, finding it difficult to not obsess

[TonyM]

I'm 46 years old. I'm a natural saver, always lived within my means, avoided debt etc. But I've never had much interest in money beyond that.

A bit over a month ago, I decided that I really had to do something more productive with my money than have it sitting in the bank. So I finally looked into investing. That lead me to FIRE, this forum etc. I read a few recommended books. Bogles "The Little Book of Common Sense Investing" left a big impression on me.

So then I invested my money in ETFs. Made some changes to my retirement investments. I'm kinda done. No need to think about this stuff anymore. Other than continuing to pump money into my investments over time.

The trouble is, I'm a naturally obsessive person. When I engage in a new hobby, I go deep. Over the years my obsessions have included: Chess, Guitar, Rowing, Martial Arts at different times. Every time it takes over my life. I spend every spare moment practising or reading about it. Just walking around I think about it all the time. Obsessing over my hobbies is something I greatly enjoy, its one of my defining personality traits.

So I'm finding it difficult to "switch off" my brain with this whole investing thing. Everything I've read convinces me that the best thing to do now is just to forget about it and let my investments compound over decades. Any temptation to "tweak" is just going to introduce additional risk and cost.

But it's really hard to do. I tried downloading FIRE podcasts, but there's really only so many ways they can repeat the same principles before it becomes tedious. I could keep reading, but that just makes me want to DO something.

Even writing this post feels like "methadone" for actual investment activity.

To buy my ETFs without paying expensive brokerage fees, I signed up for an online trading account. That worked great. Except now, every day it tempts me with graphs showing the performance of my investments, sends me emails, invites me to compare my portfolio with other users. It's really not helping me disengage.

Anyway, not really sure what I'm asking for, other than sympathy. Sometimes its hard to just do nothing and keep hands off.

 

[mrfeh]

Sounds like you've educated yourself well, and know the proper course of inaction.

Can't really help you w/ your obsessive thoughts, though. Maybe read the bogleheads forum? That way you can feel engaged, but be repeatedly reminded to not tinker.

Or start another hobby.

 

[racy]

Been there, done that. Got burned and learned. Your mileage may vary.

If you've got strong self-discipline, you could play/trade stocks with 5% of your investments to scratch your itch (until such time as a new obsession takes over).

 

[Dtail]

Sounds like you need another hobby simultaneously to help lessen the obsession.
Are there any other interests which could take over some of your time?

 

[flintnational]

Its okay to obsess about investing and make it a hobby (assuming you enjoy it). I do and I think many on this forum do also. But, we tend to channel our interest into the appropriate areas. In my case this is study not action. I continue to read books on investment theory and behavioral finance. I am currently reading William Bernstein's new book, "The Delusions of Crowds", his expansive history of religious and financial manias. His book, The Four Pillars of Investing, is one of my favorite investing books. Just don't let your interest in investing result in a lot of portfolio activity.

ETA: I spend hundreds of hours a year studying investing, the hobby. I spend 1 hour per year on our portfolio, the action. I rebalance annually.

 

[DrRoy]

It will be helpful to read "Your Money and Your Brain" by Jason Zweig. He covers mental and emotional aspects of investing.

 

[Aerides]

To buy my ETFs without paying expensive brokerage fees, I signed up for an online trading account. That worked great. Except now, every day it tempts me with graphs showing the performance of my investments, sends me emails, invites me to compare my portfolio with other users. It's really not helping me disengage.

I'm not sure where you signed up, but anywhere should have the ability to turn all of that OFF. You should be able to suppress everything but actual statements.

That's all just marketing, and you can opt out.

 

[latexman]

To balance the desire to . . . “do something, anything!” . . . I recommend you read up on, and quotes by, Warren Buffet. Second choice is Charlie Munger.

“Our favorite holding period is forever”, by Warren Buffet.

 

[ERD50]

You could engage in other aspects of personal finance, and stay away from the portfolio (since you know that set it and forget it is best).

Trust me (better yet, search the forum), there is plenty to obsess over outside of your portfolio. A few oft discussed topics:

1) Should you take out a mortgage at these historic low rates, and get that value that is tied up in the house working for you?

2) Investigate your opportunities to do Roth conversions from a trad IRA or IRA/401k rollover.

3) Take SS early, at FRA, or at 70?

Those should keep you busy, especially if you ask for opinions here at ER.org!

-ERD50

 

[Markola]

Since the best investing success comes from setting it and forgetting it, you might get yourself a Vanguard advisor to manage everything for you. That’s the only way I could relax and stop “optimizing”, i.e. fiddling around the edges with my asset allocation and usually losing money. It’s in essentially the same index funds but now in someone else’s hands at Vanguard whom I trust, because Vanguard index funds made me wealthy. I don’t worry about my portfolio much anymore and focus my optimization on the spending side. It’s better for me and a huge relief, honestly.

 

[Koolau]

I'm pretty much the opposite when it comes to investing. I much prefer to set and forget. Of course, that's cost me money, but since I have "enough" I don't worry about it. YMMV

 

[splitwdw]

Been there, done that. Got burned and learned. Your mileage may vary.

If you've got strong self-discipline, you could play/trade stocks with 5% of your investments to scratch your itch (until such time as a new obsession takes over).

+1

 

[teetee]

It took me about two years of risky trading to realize that I had investment rush. It only took you a month to realize that.

I still check my portfolio several times a month but observation is the only thing I do now. I have auto investment scheduled. Sometimes I still kick myself that I did not get into the game (e.g. the game stop stock hype in Jan.) But that is just the lingering toxin in me talking.

Slow and steady investment and high saving rate will do the work and you really don't need a long time or lots of involvement for it. It beats spending lot of time getting information that is either incomplete or biased and make impulse decisions that loses and blame the system later.

Anything else is either a lot riskier or a lot more efforts needed (house rental, flip, small business). Even good ideas / vision require working really hard with talent (gamer , youtubers, etc.)

 

[OldShooter]

It will be helpful to read "Your Money and Your Brain" by Jason Zweig. He covers mental and emotional aspects of investing.

This is quite an important book for this context. In it you will learn that our brain rewards us with dopamine when we take a risk and succeed. Another good book for you is "The Coffeehouse Investor" by Bill Schultheis. He is laid-back enough that he gives you a recipe for pumpkin pie.

One of the best aphorisms I've seen was right here on the forum, though I don't remember whom to credit: "Your portfolio is like a bar of soap. The more you handle it, the smaller it gets."

John Bogle: "Don't just do something. Sit there."

William Bernstein: “Make no mistake about it: The object of this particular game is not to get rich – It’s to not get poor.”

Warren Buffet: “The stock market is a device for transferring money from the impatient to the patient.”

Warren Buffet: "Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell. ... Lethargy bordering on sloth should remain the cornerstone of an investment style."

 

[dmpi]

Obsessive when the market is going up and obsessive when the market is going down is two different things. Obsessing when the market is going up provides impetus to learn more, and try new things, and expand your comfort zone. Obsessing when the market is going down may be detrimental to not only your financial health but also your mental health. If you don't have the mental disposition to "set it and forget it", I would tread carefully in this area.

 

[RetireeRobert]

I'd suggest set 95% of your investments on your predetermined ETF's autopilot. And contribute your new investments into those as the years roll by.

Have a small fund of 5% of your assets as your play and experiment money, to fiddle with, obsess over, play with. let that take care of your obsessive compulsive traits.

 

[captain3d]

5% for your crypto trading and see if you can beat the 95%.

 

[target2019]

To buy my ETFs without paying expensive brokerage fees, I signed up for an online trading account. That worked great. Except now, every day it tempts me with graphs showing the performance of my investments, sends me emails, invites me to compare my portfolio with other users. It's really not helping me disengage.

Anyway, not really sure what I'm asking for, other than sympathy. Sometimes its hard to just do nothing and keep hands off.

The choice of company is the problem. Depending on the ETFs you purchased, you should move the account. ETFs are free to trade at Schwab, Fidelity, and Vanguard. If that's not acceptable, you'll have to work harder at turning off unsolicited advice from your current company.

 

[Sniggle]

I find investing really interesting, and the research quite enjoyable. That said, the only stock investing I do is in my Roth IRA, with my 401K in various stock funds and retirement date funds.

Most of the stocks I have invested in are blue chips, and I generally try to stay in them for 5+ years. Some of my best buys have been Microsoft at $30, SYY in the $20's, MCD in the $80s. I just rotated out of SYY into CSCO (kinda funny going from Sysco to Cisco). and so far so good.

If the risk causes you to lose sleep at night, and you do not need the extra return, then just keep doing what you are doing. If you have some money that you do not need for 5 years, and you can find enjoyment from investing, do it.

 

[LarryMelman]

The OP has not returned to clarify his question. Is he itchy to throw money at crypto and "play in the market"? He didn't say that. Or is he just eager to keep reading and learning and figure out his investing style and monitor his holdings daily? He didn't say that either, but really those are things that any new investor should be doing. As opposed to "buy and forget".

To buy my ETFs without paying expensive brokerage fees, I signed up for an online trading account. That worked great. Except now, every day it tempts me with graphs showing the performance of my investments, sends me emails, invites me to compare my portfolio with other users.

This is the part that makes me wonder if we're being trolled. Nobody sells ETF's with "expensive brokerage fees". And online accounts at the major brokerage firms do not, by default, bombard their customers with daily come-ons. So until he returns to make a more complete accounting of his concerns, there is nothing more to say.

 

[OldShooter]

... is he just eager to keep reading and learning and figure out his investing style and monitor his holdings daily? He didn't say that either, but really those are things that any new investor should be doing. As opposed to "buy and forget".

The research says that this is a Very Bad Idea. Investors who check their portfolios frequently have consistently been shown to make less money than those who seldom check. The behavioral finance people attribute this to our human aversion to risk. Watching too closely means seeing and remembering all the downward zigs and zags, where the upward ones make psychologically less of an impression. The result is unnecessary trading and attempting to time the market. Multiple studies have shown this.

In my Adult-Ed investing class I say this: "Investing is boring. If you're not bored, you're not doing it right." Specifically, the daily behavior of any portfolio is simply noise. When you get to looking annually you start to see a little bit of pattern but it is only over five or ten years that the true results of a strategy start to become visible over the noise level and averaged over market cycles.

Re "reading" that is an excellent strategy if we are talking about the many, many books discussing the passive strategies that have been consistently shown to be the winners over a half-century of research. For example, Nobel Prize winner Michael Jensen's 1967 paper where he studied 115 professional stock-picking mutual funds:

"The evidence on mutual fund performance indicates not only that these 115 mutual funds were on average not able to predict security prices well enough to outperform a buy-the-market-and-hold policy, but also that there is very little evidence that any individual fund was able to do significantly better than that which we expected from mere random chance."

​

If "reading" means reading the output of the chattering monkeys that appears in the press and on the internet is a waste of time and I tell my students not to do it. Every possible future is predicted by one monkey or another, so when that future happens to transpire, those lucky monkeys become the "genius monkeys" until the dice are rolled again.

@TonyM, read Bill Schultheis and you will relax. If you like the first book, read his second excellent book (where he reveals an error in the pumpkin pie recipe.)

 

[Athermos4u]

Why fight it...

I'm 46 years old. I'm a natural saver, always lived within my means, avoided debt etc. But I've never had much interest in money beyond that.

A bit over a month ago, I decided that I really had to do something more productive with my money than have it sitting in the bank. So I finally looked into investing. That lead me to FIRE, this forum etc. I read a few recommended books. Bogles "The Little Book of Common Sense Investing" left a big impression on me.

So then I invested my money in ETFs. Made some changes to my retirement investments. I'm kinda done. No need to think about this stuff anymore. Other than continuing to pump money into my investments over time.

The trouble is, I'm a naturally obsessive person. When I engage in a new hobby, I go deep. Over the years my obsessions have included: Chess, Guitar, Rowing, Martial Arts at different times. Every time it takes over my life. I spend every spare moment practising or reading about it. Just walking around I think about it all the time. Obsessing over my hobbies is something I greatly enjoy, its one of my defining personality traits.

So I'm finding it difficult to "switch off" my brain with this whole investing thing. Everything I've read convinces me that the best thing to do now is just to forget about it and let my investments compound over decades. Any temptation to "tweak" is just going to introduce additional risk and cost.

But it's really hard to do. I tried downloading FIRE podcasts, but there's really only so many ways they can repeat the same principles before it becomes tedious. I could keep reading, but that just makes me want to DO something.

Even writing this post feels like "methadone" for actual investment activity.

To buy my ETFs without paying expensive brokerage fees, I signed up for an online trading account. That worked great. Except now, every day it tempts me with graphs showing the performance of my investments, sends me emails, invites me to compare my portfolio with other users. It's really not helping me disengage.

Anyway, not really sure what I'm asking for, other than sympathy. Sometimes its hard to just do nothing and keep hands off.

Why not carve out 5-10% and use the money to activily trade? There's no teacher like experience. Then you can compare your returns in your investment account versus your trading account.

 

[LarryMelman]

The research says that this is a Very Bad Idea. Investors who check their portfolios frequently have consistently been shown to make less money than those who seldom check. The behavioral finance people...

I get that you teach a class and you very much believe what you write.

But I disagree that checking on one's assets must inevitably lead to unnecessary trading. I have been investing over 35 years. Checking it (nowadays, letting Quicken check it) is part of my daily routine. Even in the earliest days, learning to watch it zig and zag was crucial to my not doing anything stupid in 1987 or 2001 or 2008 or 2020.

I think the OP would be well advised to look at the daily variation in one of his stocks or funds, and yes get all panicky about it. But then zoom out to a 5-year or 10-year or 20-year time frame, and see that "daily noise" is exactly that.

When he reaches the point where he can say "oh look, I lost $100K today" with absolutely no angst, then he has truly learned how to be an investor. Until then, he is just an uninformed amateur.

Frequent monitoring leads to a better fundamental understanding of what you own, and why you own it. It can lead to better understanding of asset allocation. It can lead to better insight into tax and estate planning. "Buy and forget" does none of these things and IMO leads to dependence on "professionals" to do things that an informed investor can do for himself.

 

[OldShooter]

Well, we'll just differ on that. I am not reporting my "opinion" however. I am reporting the results of published research by Nobel prize winners and other researchers. The research does not say that everyone who checks frequently underperforms. YMMV. It just says that the statistics are against frequent lookers and explains the behavioral factors that cause that situation.

Certainly, what you are recommending "can lead" to the results you suggest. But the research suggests that it usually does not, and it is exactly the kind of behavior that the OP is trying to resist. Can you provide any links or citations to research that suggest that your strategy is productive? Not anecdotes. Statistically valid research. ??

For the record anyone who wants to read about this and other behavioral finance results should start with Nobel winner Richard Thaler's book "Misbehaving" and follow it with Nobel winner Daniel Kahneman's "Thinking Fast and Slow." @Dr Roy's recommendation of "Your Money and Your Brain" by Jason Zweig is also excellent.

There is also a funny story floating around, probably apocryphal, that there is some Fidelity research that concluded that the best performing portfolios among their clients were held by dead people. (https://www.morningstar.com/articles/964493/from-the-archives-in-praise-of-the-dead-investors)

 

[LarryMelman]

As I said in post 20, the OP has not clearly stated his concern. He is apparently brand new to investing and does not know the lay of the land at all. He needs to educate himself about what is normal. Aphorisms (?) attributed to Bogle and others are not terribly helpful.