"Perhaps the most pernicious kind of noise of all, though, are the intra-period portfolio performance updates that are now available to virtually all investors. Returns generated over short periods are meaningless, of course—yet they can be psychologically brutal. Taleb offers an example. He postulates a red-blooded securities portfolio that generates annual returns of 15%, with a standard deviation of 10%. The sorts of numbers, that is to say, that would make people think of Warren Buffett.
And yet even a dream portfolio like this, if peeked at often enough, would cause enough angst to cause a typical investor to potentially do some really dumb things. To illustrate, Taleb shows how often our wonder portfolio would generate positive results over various short time periods. As you’ll see, a picture of smooth sailing it is not"