The Wheel of Emotion

Don’t look now, you might feel bad. And why would you want to feel bad?

Maybe the nightly news makes it sound so awful that you just want to look at your portfolio in hopes that it is just not that bad. Another reason you might want to look now is because you cannot help it. Technology enables us to look anytime. It’s just so easy!

A better reason to look is because you want to talk with your financial advisor and nbsp;here at AIWM. You could just call or email us—we’re happy to talk with you—with or without your computer in front of you.

I have a better idea. One that just might make you more money.

Instead of looking at your portfolio, watch this wonderful (and I find fascinating) three-minute video on the Wheel of Emotion from our friends at Brandes, an investment company.

The movie tells the story of two families who have absolutely amazing portfolios—with returns that are great! One family looks at their portfolio often, and they are miserable. The other family looks rarely, and the less often they look, the better their chances are that they will see their portfolio increase in value

Furthermore, and more importantly, the less often we investors look at our portfolios, the more likely we are to stay invested and keep those returns. As the video states, if these returns are normally distributed, you would still see a loss about half the time if you looked at it every day. With computer access and smart phones today, people can check on their portfolios every hour, every minute – or every second! If they did that – they likely would see a gain about 50% of the time (1). And that will make them feel miserable.

It’s only when you look at your account balance once a month that you really increase the likelihood of seeing a gain. If you can hold off and look at it once a quarter, you’d see a gain 77% of the time, and if you look at it once a year, you’d likely see a gain 93% of the time (1).

Wow. I think I’ll turn off the PC now.

(1) Source: Brandes