Bradley Associates - How Should Investors Stop Themselves From Reacting to Short-Term Market Events
luthervonn
2013-02-26
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http://online.wsj.com/article/SB10001424127887323478004578302120330630876.html
In response to a recent article on a "Mutual Fund Madness" tournament that discussed the mistake of focusing too much on short-term performance, The Wall Street Journal asked The Experts: How should investors stop themselves from reacting to short-term market events?
The Experts is an exclusive group of industry and thought leaders who engage in in-depth online discussions of topics raised in this month's Investing in Funds & ETFs Report and all future Wall Street Journal Reports.
Also be sure to watch three of The Experts—Gus Sauter, former chief investment officer at Vanguard; Meir Statman, behavioral finance professor at Santa Clara University and Sheryl Garrett, founder of the Garrett Planning Network—answer this question and others on video in a Google+ Hangout.
Terrance Odean: Review Fund Performance Once a Quarter at Most
My advice would be to not check your funds' performance more than once a quarter. There may be exceptional circumstances that require more frequently monitoring. Personally, I review the performance of funds I hold about once a year. And I make changes far less often.
Terrance Odean is the Rudd Family Foundation Professor and Chair of the Finance Group at the Haas School of Business at the University of California, Berkeley.
Matt Hougan: Keep Some Mad Money in Your Portfolio
Everyone knows what to do. Write down your plan so it's committed to paper. Have a financial adviser so you have someone who will talk you off the edge before you sell. Only look at your portfolio on a monthly, quarterly or annual basis.
It all sounds great—and it is—but for most people, it won't work.
People are human. And if you're reading The Wall Street Journal, you're interested in the markets, which means you want to react. I work for a company called IndexUniverse and even I want to react.
What do I do? Two things:
First, I keep 10% of my money to play with. Ninety percent is off-limits, and with the other 10% I can do whatever I want. Any less than that and I'm tempted to muck with the other 90%; any more than that and I'll ruin my financial future.
Related Article:
https://www.facebook.com/BradleyAssociatesMadridSpain
http://www.youtube.com/watch?v=-3Yg67HDQ4c
In response to a recent article on a "Mutual Fund Madness" tournament that discussed the mistake of focusing too much on short-term performance, The Wall Street Journal asked The Experts: How should investors stop themselves from reacting to short-term market events?
The Experts is an exclusive group of industry and thought leaders who engage in in-depth online discussions of topics raised in this month's Investing in Funds & ETFs Report and all future Wall Street Journal Reports.
Also be sure to watch three of The Experts—Gus Sauter, former chief investment officer at Vanguard; Meir Statman, behavioral finance professor at Santa Clara University and Sheryl Garrett, founder of the Garrett Planning Network—answer this question and others on video in a Google+ Hangout.
Terrance Odean: Review Fund Performance Once a Quarter at Most
My advice would be to not check your funds' performance more than once a quarter. There may be exceptional circumstances that require more frequently monitoring. Personally, I review the performance of funds I hold about once a year. And I make changes far less often.
Terrance Odean is the Rudd Family Foundation Professor and Chair of the Finance Group at the Haas School of Business at the University of California, Berkeley.
Matt Hougan: Keep Some Mad Money in Your Portfolio
Everyone knows what to do. Write down your plan so it's committed to paper. Have a financial adviser so you have someone who will talk you off the edge before you sell. Only look at your portfolio on a monthly, quarterly or annual basis.
It all sounds great—and it is—but for most people, it won't work.
People are human. And if you're reading The Wall Street Journal, you're interested in the markets, which means you want to react. I work for a company called IndexUniverse and even I want to react.
What do I do? Two things:
First, I keep 10% of my money to play with. Ninety percent is off-limits, and with the other 10% I can do whatever I want. Any less than that and I'm tempted to muck with the other 90%; any more than that and I'll ruin my financial future.
Related Article:
https://www.facebook.com/BradleyAssociatesMadridSpain
http://www.youtube.com/watch?v=-3Yg67HDQ4c
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