How to Watch the Market Without Getting Sick

As some people approach retirement, they start checking their portfolio more and more frequently. I do not recommend this. 

This is also a common behavior for people who receive stock-based compensation and have hundreds of thousands of theoretical dollars tied up in their employer’s stock. 

In both cases, I know of people who are checking their accounts multiple times a day, sometimes to the extent of having it in the background of their lives constantly. 

Again, I do not recommend this. 

Not only is it a waste of precious life energy, it can lead to some really distorted thinking. The more closely you watch it, the more distorted your thinking will tend to get. “Agh, I should have sold it all on Tuesday!” 

When is an all-or-nothing decision like that ever good? 

If I’ve learned one thing about mental health over the last few years, it’s that healthy thinking is nuanced, balanced. It means acknowledging the uncertainty inherent in life, as well as the limits of our perceptions. Often it looks like, “on one hand A could be true, on the other hand B could be true. Maybe options C, D, and E exist and I haven't even thought of them.” It just depends on how you look at things. 

Checking your account day by day does not lead to nuanced thinking. Neither does watching the news. In fact, I notice in myself that the more time I spend on those activities, the narrower of tunnel vision I get.

Should you stay up on current events? Yeah, if you wish to, or if your job requires it. But probably your job requires a lot less of it than you might think. A weekly check-in with the outside world is probably all that most people need. After all, if a news story can’t last more than a week, it probably isn’t that important. 

Meanwhile, tariffs have been the story for a couple months now, and they’re turning out to be pretty significant. 

But if you’ve been glued to the screen watching for tariff news, you may have developed some feeling that tariffs are the only thing that matters for markets, simply because this is what is causing them to move the most in the short term. 

In the long run, though, other things matter more. Interest rates and corporate earnings are the biggest factors for markets when you zoom further out. These are affected by many variable inputs, of which tariffs are just one. Eventually, something else will be marginally more impactful than tariffs, such as a cut in interest rates, or changes in corporate profitability, or declining inflation, or better housing starts, or a more balanced federal budget. Don't get me wrong, tariffs could still be important, but at some point they’ll be priced in to the market and some new variable will arise which needs to be incorporated into the stock price. 

Who knows what that variable will be? I certainly don’t. 

But I do know this. Mental hygiene is an important part of successful investment management. Good decisions do not come from being glued to the screen, but from keeping a realistic, big-picture perspective. Long term optimism, with short term pragmatism seems to be the right stance. Pragmatism says, “markets drop, let’s have a plan for that.” Optimism says, “But over the long term, the market goes up.” Both of those are important pieces. 

Pessimism, however, is almost never useful. A pessimist may be right in the short term, but they tend to do very poorly over time without realizing it because they forget the long term trend. A pessimist is so glued to the doom-and-gloom of news coverage, as well as their own narratives about how the world is collapsing, that they miss the bigger picture. 

Progress is often slow, plodding, unremarkable. It does not capture the headlines, but keeps marching along bit by bit. Crisis and catastrophe grab attention, but are usually fleeting. A pessimist fails to notice all the little things that are conspiring to make life better over time. They see only the big, splashy negatives and assume that everyone else is delusional for acting as if that the world is anything less than an unmitigated disaster. 

But actually, the pessimists are the ones who are delusional. They just aren’t seeing the whole reality. 

In the market, there is always some cause for fear, some crisis, but sooner or later stocks resume their relentless march upward, often in spite of the crisis. To borrow a line from psychology, “We don’t so much solve our problems as outgrow them” (Carl Jung). All crises sooner or later fade into the distance behind us.

I think the biggest mistake people make in markets is that they conflate the quality of their life with how the market is doing. 

But life is what you make it. It isn’t what people tell you on the news, or how the stock market is doing, or even how your personal portfolio is performing. Your life is the sum of your experiences day to day. These can be unbelievably positive. Moreover, if you’re committed to making your life a little better each day, you will be blown away by how good it can get. 

When you go outside for a walk (and you should), do you hear the birds chirping? It’s springtime. Isn’t it beautiful to hear life return to the world? Do you see flowers in bloom, throwing their color and scent upward after a long, dormant winter? When you see your friends, aren’t you glad that you aren’t alone in this world, that there are people to share the ups and downs with? Can you enjoy music? Food? A scented candle? 

As you go on a walk around your neighborhood taking in all the scents, colors, and sounds, is the stock market even real? Is it with you on your walk? Can you experience it as tangibly and as viscerally as you experience the outdoors? Does it have any meaning of its own, free of what you have assigned it? Look, managing portfolios is my full time profession, and even I manage to lose myself in nature now and then. In fact, I need to for the sake of my own sanity.

Check the market occasionally. It does have some impact on the decisions you make with your life, after all. But keep it in its proper place. Update your financial plan, take whatever actions you need to take, and then get back to the real world. You can still be happy in the present moment even if the market is down. That might sound crazy, but you truly can. Make sure you’re living in all the other areas of your life, not just your portfolio.