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Sat. Jun. 21, 2008

Can You Walk Away From It? *

Addiction can be a powerful thing. According to Wikipedia, addiction is a term used to describe a devotion, attachment, dedication, inclination, etc. Nowadays, however, the term addiction is used to describe a recurring compulsion by an individual to engage in some specific activity, despite harmful consequences to the individual’s health, mental state or social life.

I think it is safe to say a lot of people are addicted to micro-managing their portfolio. It’s not that they check the results each day, but they’ll keep their portfolio open in a browser to monitor it throughout the day. In the short-term, markets can behave very irrationally. If you are constantly watching your portfolio, this can lead you to act out of emotion – e.g. sell a good security at a bad price or buy a good security at a bad price.

The cure? Do your homework and select solid companies with a proven track record. Watching every up and down tick of good companies like Aflac (AFL), General Electric (GE) and Johnson & Johnson (JNJ) will not help your portfolio’s long term-performance.

One test of addiction is can you walk away from something without withdrawal? During my vacation last week I thought it would be an interesting test to see what I could and couldn’t walk away from. On the positive side, I did not check my portfolio a single time. I did not even watch the news to see what the markets did.

Being an admitted workaholic, I did check emails and voicemails multiple times a day. This was no surprise. However, I have identified a new addiction – my blog. In spite of having a full weeks worth of posts scheduled ahead of time, I checked my blog as much as I checked my work emails and voice mails.

Hello, my name is D4L and I am a blogaholic…

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7 Responses to “Can You Walk Away From It? *”

  1. CRex says:

    Yep, my interest in stocks has taken a heavy toll (I neglect my work)…

    It takes a lot of discipline to stay the course when markets are down, but I wonder if it doesn’t require even more to stop monitoring price fluctuations every second… :-(

    Best regards,

    Carolus

  2. Dividend Growth Investor says:

    D4L,

    As usual you are right on the money. I check my blog very often.

    I am a blogaholic as well..

  3. Brooke@Dollarfrugal says:

    My name is Brooke, and I also have a blogging problem…

    I don’t know what it is, but I must check it as often as possible.

    It would probably help if I had more response to my blog? Maybe not. I would probably be just as obsessed if I were inundated with comments.

  4. Dividends4Life says:

    CRex: The key is to buy solid long-term investments and find other ways to entertain ourselves. For me it has been this blog – I just transferred my problem. :)

    Dividend Growth Investor: and
    Brooke@Dollarfrugal: I think there are quite a few of us blogaholics.

    Best Wishes,
    D4L

  5. TheLocoMono says:

    Heh, it is tough to stay away from checking on your blog isn’t it?

    I agree with you on the understanding that making stock or fund picks means long-term goals or patience.

  6. lulugal11 says:

    I micromanage my finances. Even with things set on auto I still feel uncomfortable if I don’t check my accounts online for two days.

    I cannot imagine going a week without internet access and not checking to see if ING really sent out the payment. I know it is nuts because my systems all work but I just feel the need to check all the time.

    Like DGI and Brooke….I am also a blogaholic. I check multiple times during the day. :-)

  7. I like the last line, “Hello, my name is D4L and I am a blogaholic…”. And I am going to borrow it.

    My traveling has slowed me down for a while, but I cannot stop thinking/reading about it. It is amazing how one gets sucked into it.