Blasphemy... DO PEEK!

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siamond
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Blasphemy... DO PEEK!

Post by siamond » Sun Feb 25, 2018 5:33 pm

I was browsing through this excellent blog article from a self-described "couple of engineers with a passion for investing":
The Basics of Behavioral Finance: Tips and Tricks to Combat Your Cave Man Brain

And one point made me strongly react. FINALLY somebody who articulated what I've been practicing and preaching for a while. I can't agree more. DO PEEK!
Unique Advice – Check Your Accounts at Least Weekly, Ideally Daily
This is financial blasphemy to many. The current thinking in the world is that since you have these behavioral weaknesses you should compensate for them by avoiding your finances. The thinking is that you will do something stupid if you look at them. I don’t disagree…..assuming that you look at them infrequently and if you only look at them when the financial world seems to be falling apart. This is exactly what happens. People are going through their lives: family, work, friends, vacations etc. They don’t really pay much attention to Wall Street or their investments. Then all of a sudden there is a major market correction or crash and everyone is talking about “the market”. So what do they do, they decide to see how their 401(k) is doing and they are SHOCKED at how much it has lost, they panic, they sell.

I propose a different approach. If you are armed with knowledge and logic, daily swings in the market will not phase you. More importantly, I believe that growing accustomed to the daily swings in the market will harden you for more robust corrections in the future.

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alpenglow
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Re: Blasphemy... DO PEEK!

Post by alpenglow » Sun Feb 25, 2018 5:43 pm

I've always agreed with this approach!

ResearchMed
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Re: Blasphemy... DO PEEK!

Post by ResearchMed » Sun Feb 25, 2018 5:48 pm

siamond wrote:
Sun Feb 25, 2018 5:33 pm
I was browsing through this excellent blog article from a self-described "couple of engineers with a passion for investing":
The Basics of Behavioral Finance: Tips and Tricks to Combat Your Cave Man Brain

And one point made me strongly react. FINALLY somebody who articulated what I've been practicing and preaching for a while. I can't agree more. DO PEEK!
Unique Advice – Check Your Accounts at Least Weekly, Ideally Daily
This is financial blasphemy to many. The current thinking in the world is that since you have these behavioral weaknesses you should compensate for them by avoiding your finances. The thinking is that you will do something stupid if you look at them. I don’t disagree…..assuming that you look at them infrequently and if you only look at them when the financial world seems to be falling apart. This is exactly what happens. People are going through their lives: family, work, friends, vacations etc. They don’t really pay much attention to Wall Street or their investments. Then all of a sudden there is a major market correction or crash and everyone is talking about “the market”. So what do they do, they decide to see how their 401(k) is doing and they are SHOCKED at how much it has lost, they panic, they sell.

I propose a different approach. If you are armed with knowledge and logic, daily swings in the market will not phase you. More importantly, I believe that growing accustomed to the daily swings in the market will harden you for more robust corrections in the future.
This has been our policy/philosophy from the start, as I've mentioned previously a few times.

"Looking" (I don't consider it "peeking", which suggests something is perhaps a bit wrong) almost daily started out so I could "learn" how things were "doing". I didn't even know enough then to articulate that this meant "learning how our balances were doing in response to market conditions or events", but that's what it was, of course.

Over time, that easily became, "Oh, yeah, we're down [or up] because of [market condition/event], and it will recover..." - and that goes for *both* the nice new highs as well as the recent lows.
But of course, the "highs" kept coming more often, although those also reflected additional contributions.

At first, I even graphed every holding. (Yup, every holding. But I'm a numbers geek, and like graphs, period.)
I don't do that anymore, and haven't for a long time, but it definitely helped me see and feel "how things were going".

Even at our recent new (and surprisingly good) "highs", I kept reminding DH that "remember, we could lose $X, but don't worry...", etc.
That is when we removed a significant chunk about 1-2 months ago, which also coincided with his declaring an outside window in terms of timing to his very belated retirement. Point is, it was time to collect some cash.
We had been quite aggressive until rather recently.

But LOOKING was always very important.
I can't imagine "not knowing" OR "being blindsided" by an occasional glance that happened to be at a temporary "down" that thus appeared really dramatic OR wondering "how we are doing" during various market gymnastics.

RM
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whodidntante
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Re: Blasphemy... DO PEEK!

Post by whodidntante » Sun Feb 25, 2018 5:57 pm

I know someone who bought a money market fund for 8 years in her Roth when she thought she was buying an S&P 500 fund. You don't have to look every day, but it's irresponsible to never look.

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Toons
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Re: Blasphemy... DO PEEK!

Post by Toons » Sun Feb 25, 2018 5:58 pm

For the "Masses",
To Peek?
Weekly?
I disagree.
Quarterly ,maybe.
Just Sayin.




:arrow: :mrgreen:

I
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

Bob
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Re: Blasphemy... DO PEEK!

Post by Bob » Sun Feb 25, 2018 6:02 pm

Not blasphemy at all, IMHO.

For many people, including me, this should be the preferred approach. This group of people are also probably more involved in managing their budgets and their overall financial destiny. Also, with online fraud it may be a good way to identify account hacking and fraud earlier than not.

On the other hand, for many other people it may be more than they can or want to deal with. I can understand that as my DW would definitively fall into the later group ;) And it worries me since I have no solution I am happy with for how she will be able to deal with things financial after I am gone.

What would be interesting -- and helpful -- would be information about if one group(peekers/trackers or "avoiders") actually does better than the other over time. ;)

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Sandtrap
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Re: Blasphemy... DO PEEK!

Post by Sandtrap » Sun Feb 25, 2018 6:05 pm

IMHO sound "Bogle" basics negate the need to "peek" and, in fact, inspire confidence so that one can attend to other things in life.
Otherwise, it's like watching a pot of water waiting for it to boil.. . . or paint dry. :shock:
"Bogle Basics" require that one be a careful steward of one's assets without immersion into the process.
As long as one is following a sound IPS with protocols for rebalancing, and other maintenance tasks, there's no need to tinker and dither. That's the whole purpose of establishing one's "sleep factor".
j :D

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Kenkat
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Re: Blasphemy... DO PEEK!

Post by Kenkat » Sun Feb 25, 2018 6:07 pm

I look at my portfolio value at the end of every day the market is open. I do nothing with the information beyond noting how much you can gain or lose in a day and saying “well now that’s interesting”.

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arcticpineapplecorp.
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Re: Blasphemy... DO PEEK!

Post by arcticpineapplecorp. » Sun Feb 25, 2018 6:10 pm

The truth is so rarely black and white, as in ALWAYS check your portfolio or NEVER check your portfolio, but a moderate approach seems to work best.

https://jarredbunch.com/how-often-check ... portfolio/
It can even fluctuate hundreds of points one way, and back the opposite way before the closing bell rings. The average daily swing for over 40 years has been +\- 1.4%. So, the more often you check your portfolio, the greater your chances of seeing it when the market is down.

And when you see negative numbers staring at you, your emotions will stop you in your tracks every time. Thanks to a little thing called myopic loss aversion...

Investors who check their portfolios often will perceive investing to be riskier than investors who don’t. According to Betterment’s data on login frequency, checking your portfolio quarterly instead of daily can reduce the chance of you seeing a moderate loss (of -2% or more) from 25% to 12%...

In a 1997 study by Kahnerman and Tversky, the idea that loss aversion reduces investor returns was confirmed once again by their research. Take this statement straight from their abstract:

“The investors who got the most frequent feedback (and thus the most information) took the least risk and earned the least money.”

In other words, the more time you spend checking and analyzing your portfolio, the more likely you are to let your emotions take control.
source: https://jarredbunch.com/how-often-check ... portfolio/
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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welderwannabe
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Re: Blasphemy... DO PEEK!

Post by welderwannabe » Sun Feb 25, 2018 6:12 pm

whodidntante wrote:
Sun Feb 25, 2018 5:57 pm
I know someone who bought a money market fund for 8 years in her Roth when she thought she was buying an S&P 500 fund. You don't have to look every day, but it's irresponsible to never look.
If that 8 year period was 1/1/2001 to 1/1/2009 she would have been better off with the money market :)

I am one of those guys that looks 3-4 times a week, although I honestly pay more attention to the yield on the 10 year treasury than I do the S&P 500.
Last edited by welderwannabe on Sun Feb 25, 2018 6:15 pm, edited 1 time in total.
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Alexa9
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Re: Blasphemy... DO PEEK!

Post by Alexa9 » Sun Feb 25, 2018 6:13 pm

I find it boring watching daily movement. If there's a big swing worthy of rebalancing, you'll usually hear about it from other people or the news.

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digarei
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Re: Blasphemy... DO PEEK!

Post by digarei » Sun Feb 25, 2018 6:19 pm

Not sure it what respect this would be considered blasphemy.

‘Don’t Peek!’ isnt one of the ten commandments or part of ancient scripture. It remains a delightful metaphor used by Jack Bogle to encourage people to invest early so that they can obtain the result of compounding of earnings and dividends by retirement.

The equivalent of Buy [early] and Hold.

I’m sure it’s not meant to be taken literally.
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thx1138
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Re: Blasphemy... DO PEEK!

Post by thx1138 » Sun Feb 25, 2018 6:22 pm

In a similar vein the place where I often eat breakfast has a WSJ laying around. If no one else is reading it I'll usually pick it up. Doing that over many years is a good way to train yourself how utterly worthless the financial press is and makes it much easier to ignore it all in the long run.

The obvious risk is some people may not be able to restrain themselves from acting on what they've read early on. And from overhearing conversations at the same breakfast place there are clearly people who will never learn this lesson given they obviously haven't over their many decades of investing.

So I think it really depends on the person. We apparently aren't all wired the same way.

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Re: Blasphemy... DO PEEK!

Post by Wildebeest » Sun Feb 25, 2018 6:50 pm

I did not peek in 2008 and 2009 and I liked it.

I have not checked in a while.

May be part of my Investment Policy Statement should be to check once a year when taxes are due.
The Golden Rule: One should treat others as one would like others to treat oneself.

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siamond
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Re: Blasphemy... DO PEEK!

Post by siamond » Sun Feb 25, 2018 6:59 pm

digarei wrote:
Sun Feb 25, 2018 6:19 pm
I’m sure it’s not meant to be taken literally.
I agree with you that Jack tends to express positions which are much more flexible than what is often asserted on this forum, or that his quotes are often taken out of context. In this particular case, having listened to him explain the matter, I am not so sure though. I did get the impression he meant it literally. Maybe I'm mistaken...

What is for sure is that quite a few people DO take it literally. And then I totally agree with the likely dire consequences that the blogger explained. Risk tolerance is acquired, it is NOT innate.

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pennstater2005
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Re: Blasphemy... DO PEEK!

Post by pennstater2005 » Sun Feb 25, 2018 7:08 pm

The nice thing about index funds is I have a general idea what is going on by just checking to see what the market did that day.
“If you think nobody cares if you're alive, try missing a couple of car payments.” – Earl Wilson

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nedsaid
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Re: Blasphemy... DO PEEK!

Post by nedsaid » Sun Feb 25, 2018 7:11 pm

I peek a lot because I am a record keeper. Investments, dividends, reinvestment, all of that needs to be recorded in Quicken. So I have to log in to my various accounts so that I can get at the transaction history. It is also a good practice to check often and make certain no one has tampered with my accounts.
A fool and his money are good for business.

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blueblock
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Re: Blasphemy... DO PEEK!

Post by blueblock » Sun Feb 25, 2018 7:15 pm

I look just about every day and always have. I know what the markets are doing and how they should affect my portfolio, then at the end of the day I check. It only takes a few minutes and seems like the responsible thing to do with my life savings.

Happily, I have never been tempted to alter my plan based on what the markets are doing or not doing.

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Doom&Gloom
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Re: Blasphemy... DO PEEK!

Post by Doom&Gloom » Sun Feb 25, 2018 7:26 pm

I'm a chronic peeker but not a compulsive peeker. I am a compulsive non-impulsive person.

I view it the same as frequent weighing during weight loss attempts. Conventional wisdom is weighing every day is discouraging to dieters because the weights may fluctuate from day to day. Same with portfolios. Fluctuations happen; get used to seeing them for what they are and they won't compel you to violate your plan.

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cfs
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Re: Blasphemy... DO PEEK!

Post by cfs » Sun Feb 25, 2018 7:36 pm

The spreadsheet for The Lowest Rated Fund [my boring portfolio] is updated after the market close on the last day of the month, so, that is at least 12 peeks each year. My signature applies, y gracias por leer ~cfs~
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Wildebeest
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Re: Blasphemy... DO PEEK!

Post by Wildebeest » Sun Feb 25, 2018 7:41 pm

I step on the scale every day when at home. It does not hurt. It did when I gained 10 lbs in one week on vacation and I enjoyed the food and it was really good. No regrets.

I do not check my account balance. May be I learned not to care.
The Golden Rule: One should treat others as one would like others to treat oneself.

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badbreath
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Re: Blasphemy... DO PEEK!

Post by badbreath » Sun Feb 25, 2018 7:41 pm

I peek once at the end of the month record were i am (up or down) then move on
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

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Portfolio7
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Re: Blasphemy... DO PEEK!

Post by Portfolio7 » Sun Feb 25, 2018 7:44 pm

Munger is known for emphasizing the importance of avoiding stupid decisions w/r/t investing, and that works for me. Whether I look at my portfolio balance or not, as long as I avoid stupid decisions, I'm ok.

There have been times where I didn't look for long periods, as much as a full year (maybe even longer in 20001-2003, that was my first big draw down and it was very painful for me! I just shut my eyes and kept shoveling cash at our 401k accounts.)

Lately I look daily. I know one weakness for me is tinkering, and I give myself room to do that, but I have hard limits on the scale and scope. Looking daily doesn't seem to impel me to ignore those limits. Another weakness is the desire to retire sooner, but a 70/30 portfolio isn't totally out of sorts for someone 10 yrs from retirement, I think (and 15 from FRA). Slightly aggressive, but that fits my profile anyways. I also benchmark my portfolio in an attempt to confirm I'm not unwittingly doing something stupid.

The proof is in the pudding (or the older version, "The proof of the pudding is in the eating".) :beer
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AllieTB1323
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Re: Blasphemy... DO PEEK!

Post by AllieTB1323 » Sun Feb 25, 2018 7:50 pm

Kenkat wrote:
Sun Feb 25, 2018 6:07 pm
I look at my portfolio value at the end of every day the market is open. I do nothing with the information beyond noting how much you can gain or lose in a day and saying “well now that’s interesting”.
+1
We have been doing this too many years to get excited by the daily changes.

rob65
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Re: Blasphemy... DO PEEK!

Post by rob65 » Sun Feb 25, 2018 8:00 pm

Seems worth just mentioning that fraud protection policies require you to review statements and provide timely notice if fraud has occurred.

JBTX
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Re: Blasphemy... DO PEEK!

Post by JBTX » Sun Feb 25, 2018 8:02 pm

I tend to update everything weekly (via quicken). Occasionally more often.

I never thought about it, but seeing the balance daily does tend to decondition you from day to day changes and hides long term changes. Sometimes I look at the overall number and start to think it should have grown more, then I compare it to a year ago and it has grown significantly. Ive just looked at the current number (in that ball park) what was 1 year ago seems a long time ago.

letsgobobby
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Re: Blasphemy... DO PEEK!

Post by letsgobobby » Sun Feb 25, 2018 8:04 pm

Some people should look every day and some people shouldn't. The danger is in thinking you are one type when you are the other.

As for the author's hypothesis, it's a cute theory. Does he have evidence that exposure to daily changes of 1% has any effect on one's tolerance of generational swings of 60%? Do we expose people to spiders and expect them not to freak out when they go to war? What does a small and trivial risk have to do with an existential one?

ResearchMed
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Re: Blasphemy... DO PEEK!

Post by ResearchMed » Sun Feb 25, 2018 8:04 pm

Doom&Gloom wrote:
Sun Feb 25, 2018 7:26 pm
I'm a chronic peeker but not a compulsive peeker. I am a compulsive non-impulsive person.

I view it the same as frequent weighing during weight loss attempts. Conventional wisdom is weighing every day is discouraging to dieters because the weights may fluctuate from day to day. Same with portfolios. Fluctuations happen; get used to seeing them for what they are and they won't compel you to violate your plan.
We weigh ourselves most days.

But on those occasions when we're on a serious weight-loss regime, then we weigh ourselves daily without exception.
What we do is make special note of "each new low", which is what counts. We purposefully ignore the upward blips, which always occur throughout.

I guess this is a very good parallel to looking daily at the investment total.
We definitely note each new "high", and simply notice-then-ignore the "down" days.

RM
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goingup
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Re: Blasphemy... DO PEEK!

Post by goingup » Sun Feb 25, 2018 8:20 pm

Larry has written about this a number of times, citing research on Myopic Loss Aversion.

The idea is that losses are very painful and if we look at the portfolio frequently we'll see them. That hurts. Because losses are painful and we humans don't like pain, we'll structure our holdings to be too conservative. The effect is more insidious than just panic selling.

Look less often and you won't see the fits, starts, and swoons. It then may be easier to stay the course and take appropriate risks.

I believe it's better not to peek frequently. However, I'm a chronic peeker.

Dottie57
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Re: Blasphemy... DO PEEK!

Post by Dottie57 » Sun Feb 25, 2018 8:37 pm

I look several times a week. I just started within the last couple of years. If the market goes down the looking goes down to a couple of times a month. But I do want to be aware of what is going on in my accounts.

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Re: Blasphemy... DO PEEK!

Post by Grt2bOutdoors » Sun Feb 25, 2018 8:44 pm

I look, the key though is not to tinker. Look, don't touch often, all is well.
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Phineas J. Whoopee
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Re: Blasphemy... DO PEEK!

Post by Phineas J. Whoopee » Sun Feb 25, 2018 8:53 pm

What's with all these religious references around here?

We're talking about worldly rationality, not spiritual belief. To the extent there's anything about not peeking, or other advice like that, it's to restrain one's own animal spirits, a preexisting term used by, but certainly not invented by, J. M. Keynes.

PJW
Last edited by Phineas J. Whoopee on Sun Feb 25, 2018 8:58 pm, edited 1 time in total.

chw
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Re: Blasphemy... DO PEEK!

Post by chw » Sun Feb 25, 2018 8:57 pm

siamond wrote:
Sun Feb 25, 2018 5:33 pm
I was browsing through this excellent blog article from a self-described "couple of engineers with a passion for investing":
The Basics of Behavioral Finance: Tips and Tricks to Combat Your Cave Man Brain

And one point made me strongly react. FINALLY somebody who articulated what I've been practicing and preaching for a while. I can't agree more. DO PEEK!
Unique Advice – Check Your Accounts at Least Weekly, Ideally Daily
This is financial blasphemy to many. The current thinking in the world is that since you have these behavioral weaknesses you should compensate for them by avoiding your finances. The thinking is that you will do something stupid if you look at them. I don’t disagree…..assuming that you look at them infrequently and if you only look at them when the financial world seems to be falling apart. This is exactly what happens. People are going through their lives: family, work, friends, vacations etc. They don’t really pay much attention to Wall Street or their investments. Then all of a sudden there is a major market correction or crash and everyone is talking about “the market”. So what do they do, they decide to see how their 401(k) is doing and they are SHOCKED at how much it has lost, they panic, they sell.

I propose a different approach. If you are armed with knowledge and logic, daily swings in the market will not phase you. More importantly, I believe that growing accustomed to the daily swings in the market will harden you for more robust corrections in the future.
Totally agree!

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3wood
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Re: Blasphemy... DO PEEK!

Post by 3wood » Sun Feb 25, 2018 9:02 pm

I will look as long as the share price is increasing. I will avoid looking in corrections or bear markets. I make a mental note of the share price and go from there. Since I am 98% in Vanguard 2035 fund it's easy to do. Back in '08 I didn't look at my account for well over a year (maybe 2, I forget). My deposits are on auto pilot and except when I do my backdoor Roth I don't need to do anything.

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Re: Blasphemy... DO PEEK!

Post by AlohaJoe » Sun Feb 25, 2018 9:03 pm

welderwannabe wrote:
Sun Feb 25, 2018 6:12 pm
I am one of those guys that looks 3-4 times a week, although I honestly pay more attention to the yield on the 10 year treasury than I do the S&P 500.
You look at the yield on the 10 year treasury more than 3-4 times a week?!? What on earth for?!

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happysteward
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Re: Blasphemy... DO PEEK!

Post by happysteward » Sun Feb 25, 2018 9:04 pm

One per quarter, on a defined date, period. This strategy has helped me a great deal.
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welderwannabe
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Re: Blasphemy... DO PEEK!

Post by welderwannabe » Sun Feb 25, 2018 9:06 pm

AlohaJoe wrote:
Sun Feb 25, 2018 9:03 pm
You look at the yield on the 10 year treasury more than 3-4 times a week?!? What on earth for?!
I am just more interested in where Interest rates are going than the S&P. This is my favorite page:

https://www.marketwatch.com/investing/b ... trycode=bx
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digarei
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Re: Blasphemy... DO PEEK!

Post by digarei » Sun Feb 25, 2018 9:11 pm

siamond wrote:
Sun Feb 25, 2018 6:59 pm
digarei wrote:
Sun Feb 25, 2018 6:19 pm
I’m sure it’s not meant to be taken literally.
I agree with you that Jack tends to express positions which are much more flexible than what is often asserted on this forum, or that his quotes are often taken out of context. In this particular case, having listened to him explain the matter, I am not so sure though. I did get the impression he meant it literally. Maybe I'm mistaken...

What is for sure is that quite a few people DO take it literally. And then I totally agree with the likely dire consequences that the blogger explained. Risk tolerance is acquired, it is NOT innate.
Yes, investors who have not acquired at least some knowledge and experience are more likely to become panicked in a precipitous market decline.

I was thinking back to my own reaction during the fall of 2008... I had just enough experience to know that selling off stocks was not an appropriate response to the crisis and would likely prove unhelpful in reaching my goals.

While the markets continued to deflate I found it easier to ignore my statements, averting my gaze from the unfolding crisis. By 2010/Q1, equities had regained some of their losses and I resumed transcribing account balances into my spreadsheet. Even today, I’m much more likely to fuss over my numbers in an up market. In a bad year, I give my portfolio minimal attention.

I guess this could be characterized as selective “no peeking”.

I’m never completely sure of the audience Jack Bogle is trying to reach with his comments. But I suspect it’s more the ‘average joe’ than the average Boglehead.
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nps
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Re: Blasphemy... DO PEEK!

Post by nps » Sun Feb 25, 2018 10:19 pm

It's worth keeping in mind that for anyone invested in broad market indexes it's been almost ten years since you may have been seriously bothered by peeking at the value of your accumulated shares, if you were even in the market at that time. Hard to know what it feels like unless you're in it, and it may be hard to remember precisely how it felt even if you were especially given the quick recovery and subsequent prolonged bull market.

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calmaniac
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Re: Blasphemy... DO PEEK!

Post by calmaniac » Sun Feb 25, 2018 10:23 pm

I have better things to do with my time and mental bandwidth than to look at my stocks every day. Monthly maybe, quarterly OK, but daily? Life is too precious to waste the time.

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siamond
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Re: Blasphemy... DO PEEK!

Post by siamond » Sun Feb 25, 2018 10:47 pm

letsgobobby wrote:
Sun Feb 25, 2018 8:04 pm
Some people should look every day and some people shouldn't. The danger is in thinking you are one type when you are the other.

As for the author's hypothesis, it's a cute theory. Does he have evidence that exposure to daily changes of 1% has any effect on one's tolerance of generational swings of 60%? Do we expose people to spiders and expect them not to freak out when they go to war? What does a small and trivial risk have to do with an existential one?
Well, it is a little more than a 'cute theory'. I could easily come up with 100s of examples in life where robustness against... whatever... is not innate, but needs to acquired through sustained practice. I mean, no need to make a list, evidence is everywhere.

As to 1% against 60%, the stock market doesn't display 1% variations for years before suddenly falling 60%, it goes all over the place in-between in a very random manner. The more you experience those diverse outcomes, the more you'll be ready for small and big crises (as well as not overreacting to big bull markets), or at least should cope with limited damage. And if you make some errors in the process, well, this is the best way to learn.

I somewhat agree with your first point though. Some people are better off playing ostrich. Others are better off keeping their eyes wide open. I would just add that most should be encouraged to practice opening their eyes. The ostrich game can't go for long in modern times with a never-ending barrage of over-excitable media. An excellent book to read is The Science of Fear, a clear demonstration of the fact that we need more than ever to learn to control our fears. Or at least try.

Bradiator
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Re: Blasphemy... DO PEEK!

Post by Bradiator » Sun Feb 25, 2018 11:14 pm

siamond wrote:
Sun Feb 25, 2018 10:47 pm
Some people are better off playing ostrich. Others are better off keeping their eyes wide open.
I agree. What's right for each of us is different.

My guess is that the type of person who's active on this message board is a person who checks their account frequently and manages not to make many grave mistakes as a result.

I think Mr. Bogle's advice was probably the right advice for the vast majority of people who've heard it.

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JoMoney
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Re: Blasphemy... DO PEEK!

Post by JoMoney » Sun Feb 25, 2018 11:16 pm

Yeah... I understand where Mr. Bogle is coming from with the suggestion, but I think, for multiple reasons, one should "peek" regularly.
https://personal.vanguard.com/us/help/S ... ontent.jsp
Vanguard's online fraud policy
Our commitment regarding online security is simple. If assets are taken from your account in an unauthorized online transaction on Vanguard.com®—and you've followed the steps described in the Your responsibilities section below ...
- Check your account frequently. Promptly and completely review all information we send you.
- Report any errors or discrepancies in your account and any suspected unauthorized transactions or account changes to Vanguard immediately.
...
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

michaelsieg
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Re: Blasphemy... DO PEEK!

Post by michaelsieg » Sun Feb 25, 2018 11:34 pm

Thanks for posting Siamond - I like the article and the website is also interesting.
Another thing that I found interesting in the article was the fact that in the last 30 years 10% corrections occur more than 2.3 times per year on average and 20% corrections about 0.7 times per year. That is more than I would have expected over the past 30 years - may be the lack of severe volatility until recently has lulled me in a false sense of security and made me forget several near 10% daily drops during the Lehmann crisis.
But what it shows, that one could make a good argument to buy some extra equities during the corrections while in the accumulation phase (or during RBDs as per Livesoft).

letsgobobby
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Re: Blasphemy... DO PEEK!

Post by letsgobobby » Mon Feb 26, 2018 12:52 am

siamond wrote:
Sun Feb 25, 2018 10:47 pm
letsgobobby wrote:
Sun Feb 25, 2018 8:04 pm
Some people should look every day and some people shouldn't. The danger is in thinking you are one type when you are the other.

As for the author's hypothesis, it's a cute theory. Does he have evidence that exposure to daily changes of 1% has any effect on one's tolerance of generational swings of 60%? Do we expose people to spiders and expect them not to freak out when they go to war? What does a small and trivial risk have to do with an existential one?
Well, it is a little more than a 'cute theory'. I could easily come up with 100s of examples in life where robustness against... whatever... is not innate, but needs to acquired through sustained practice. I mean, no need to make a list, evidence is everywhere.

As to 1% against 60%, the stock market doesn't display 1% variations for years before suddenly falling 60%, it goes all over the place in-between in a very random manner. The more you experience those diverse outcomes, the more you'll be ready for small and big crises (as well as not overreacting to big bull markets), or at least should cope with limited damage. And if you make some errors in the process, well, this is the best way to learn.

I somewhat agree with your first point though. Some people are better off playing ostrich. Others are better off keeping their eyes wide open. I would just add that most should be encouraged to practice opening their eyes. The ostrich game can't go for long in modern times with a never-ending barrage of over-excitable media. An excellent book to read is The Science of Fear, a clear demonstration of the fact that we need more than ever to learn to control our fears. Or at least try.
Oh sure, I believe in densensitization via exposure therapy. It’s my life work, after all.

What I don’t believe is that exposing oneself to, say, a tarantula, has any bearing whatever on one’s reaction when the Bugs come calling:

https://m.youtube.com/watch?v=fgq0ecMHfzc

And the generational 60-90% drops - those are Bugs, with a capital B. They’re not spiders.

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Re: Blasphemy... DO PEEK!

Post by Dale_G » Mon Feb 26, 2018 2:19 am

I update my portfolio spreadsheet most days of the week (Lotus 123 Millennium Edition circa 1999) - and my Lotus files go back to 1982. Various computer crashes eliminate any records before that. Too bad, I like to know what I have done and why. Pre-1982, I can only guess.

I am an octogenarian Engineer, but I still like to measure things. Tracking my investments is a hobby, and I suspect that is the case for most Bogleheads with more than 500 posts. I suspect investing is almost surely a hobby for those with more than 5,000 posts.

Whether I am up or down a few kilo-bucks on a given day doesn't matter, certainly my anguish on a down day doesn't exceed my joy on an up day. In fact there is neither joy nor anguish, it is what it is. "Peeking" lets me know whether excess funds ought to go to equities or bonds - or whether I am likely to run out of money next week or 50 years from now.

We are a diverse people, with diverse interests and diverse goals. There is plenty of room for diverse approaches.

Dale
Volatility is my friend

cludlow
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Re: Blasphemy... DO PEEK!

Post by cludlow » Mon Feb 26, 2018 7:25 am

I'm the author of the blog, thanks Siamond for sharing on Bogleheads. This is my first experience posting on Bogleheads, first time caller long time listener!

I've been very impressed with the thoughtful conversation, it has really made me think even more about additional benefits of "peeking" including fraud protection and what I'll call bull hardening. We forget it is not just selling in panic we need to protect ourselves against, it is also buying into euphoria.

The post about tinkering as a weakness also rung true for me. I think another point to my blog could be to "Know Thyself!" If you are a tinkerer and you must scratch that itch, find a way to smartly design that into your plan. I'm not a tinkerer per se, but I do allow myself on a yearly basis to adjust my 401(k) contributions within reason (5% change) to assets that I believe are undervalued relative to others. At this point my contributions don't move the needle much on my overall balance, but I get the feeling of doing "something."

WRT myopic loss aversion, it is a great point. Seeing those daily loses could cause some to be more conservative. However, I would point out a critical piece of my blog was that there is no silver bullet to solving the behavioral finance issue, it involves a holistic approach. If you understand market history and the benefits of asset allocation and having low fees I think most people (not all) will be able to tame their loss aversion issues.

One poster stated "risk tolerance is acquired." I obviously agree with that based on my blog. However, I also agree with many of the posts basically saying different strokes for different folks. My opinion is that we are all on a spectrum regarding our ability to naturally handle these behavioral finance issues. I believe that all of us can improve from where we naturally start on that spectrum.

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Kenkat
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Re: Blasphemy... DO PEEK!

Post by Kenkat » Mon Feb 26, 2018 8:31 am

calmaniac wrote:
Sun Feb 25, 2018 10:23 pm
I have better things to do with my time and mental bandwidth than to look at my stocks every day. Monthly maybe, quarterly OK, but daily? Life is too precious to waste the time.
If you have your portfolio online somewhere - for example, Morningstar Portfolio Tracker - it takes about 10 seconds to see your balance, daily change dollars and percent and YTD percent.

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Re: Blasphemy... DO PEEK!

Post by Call_Me_Op » Mon Feb 26, 2018 9:42 am

The reason you should peek, and peek frequently, is to be alerted to any fraud in your account(s).
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Re: Blasphemy... DO PEEK!

Post by Broken Man 1999 » Mon Feb 26, 2018 9:56 am

Call_Me_Op wrote:
Mon Feb 26, 2018 9:42 am
The reason you should peek, and peek frequently, is to be alerted to any fraud in your account(s).
Yep!

That is why I catch fraud on my credit cards early and have to wait until it is a posted transaction instead of a pending transaction.

It took 45 years to get to where I am today, and I will always check frequently.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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