STREET DOGS: The folly of keeping close tabs on stocks
People are sensitive to short-term losses in long-term investments
If owning stocks is a long-term project for you, following their changes constantly is a very, very bad idea. It’s the worst possible thing you can do, because people are so sensitive to short-term losses. If you count your money every day, you’ll be miserable. — Daniel Kahneman.
In our decision-making lives, we aren’t that good at taking this kind of perspective — at accessing the past and future to get a better view of how any given moment might fit into the scope of time. It just feels how it feels in the moment and we react to it. We make a long-term stock investment because we want it to appreciate over years or decades. Yet there we are, watching a downward tick over a few minutes, consumed by imagining the worst. What’s the volume? Is it heavier than usual? Better check the news stories. Better check the message boards to find out what rumours are circulating. — Annie Duke...