How often to check fund value?

TranceNRG

Lokolo wrote: »

Depends what you mean by check.... I download fund prices daily into a local database which then displays in my finance spreadsheet.... so whenever I open it I have a look at my return!

Hi Lokolo, I have a some money invested through funds on Fidelity. I'm interested in doing something similar to what you are doing. Can you please briefly explain the process? Any chance of downloading an example excel sheet?

cheers.

JohnRo

CLI offshore bond once a month, every month, when I request a valuation statement to update the spreadsheet. No direct online account access to this info so that stops me checking more often or I probably would.

Index tracker portfolio - varies, sometimes a few days in a row when purchasing, sometimes two or three weeks will pass between data retrievals.

Income portfolio - almost but not quite every day, mainly to transfer and update data in the spreadsheet I use to manage rebalancing purchases and to maintain the schedule with current data.

https://forums.moneysavingexpert.com/discussion/4662291

MadMat

I have a quick peek one or twice a week, once a month I have a proper look at the accounts to make sure that months direct debit purchases have all gone through smoothly.

Mat

atypical

Taleb talked about this in Fooled by Randomness. Site explains the same here:
http://www.efficientfrontier.com/ef/102/taleb.htm

Positive return probability depending on portfolio check frequency (after making some assumptions):
Daily - 51.20%
Monthly - 55.49%
Yearly - 69.15%
10 yearly - 99.41%

"Over relatively brief periods, return increases proportionally with time but risk increases more slowly, as the square root of time. This means that the risk/return ratio becomes increasingly favorable over long time horizons."

le_loup

atypical wrote: »

Taleb talked about this in Fooled by Randomness.

.......... and what a load of meaningless mumbo jumbo it is!


"I'm a quant, therefor believe me." So many fools have done over so over the past few years.


Multiply anything by the square root of anything else and a fraction of a standard deviation and you will get an interesting answer to nothing at all.


Remember Long Term Capital Management? They did hard sums.


Talk about blinded by pseudo science!

masonic

le_loup wrote: »

.......... and what a load of meaningless mumbo jumbo it is!

Well you can choose whether or not to believe utility functions have any validity in quantifying decision making, but in this case they are only being used to try to rationalise an observable trait, namely that people tend to fear short term losses more than they value long term gains.

Suppose you have decided to pursue an investment strategy and you take some time to do your research and carefully select some investments that meet your needs, of course taking a long term view because you know that there are inevitable ups and downs in the market and that only over the long term will your objectives be realised.

Now, having carefully and rationally selected those investments and put your plan into execution, you log in each day to check how you are doing. With each day of rises, your confidence grows, but then along comes a few days of significant and sustained falls, perhaps followed by a period where performance flatlines, where your heart sinks and you wonder if you're making a big mistake. Perhaps you notice the shiny new fund promoted by that nice Mr. Dampier has fared better and think about selling up and switching into that, because you're now down over 10% and this really doesn't bode well for the future. Besides a fund switch at this point, to anything, will wipe out those nasty red numbers on your portfolio screen, which feel like daggers in your heart each time you see them...

Or, you could decide that the value of your investments from one day to the next doesn't really have any bearing on your plan and that you could save yourself a lot of angst (not to mention the potential for reacting irrationally to the price movements) by not obsessing and checking them every day. Instead, stick to the plan and review it at predefined intervals, and if you must, on the basis of actual news. After all, what will the price tomorrow, the day after, or even in a fortnight, tell you about what the price will be in 10 years?

le_loup

Oh, I don't disagree with the principal. It's the use of maths to prove it with which I take umbrage. Scholes & Merton won a Nobel Prize for their genius at conning others with the most unbelievably convoluted formulas and I suspect that the Efficient Frontiers guy has wrapped common sense into a formula to make his hypothesis appear more credible.


Just to reiterate, I do believe that looking at progress of holdings too frequently is a bad thing. But I do not believe that human nature can be formulated.

InvestInPoker

It's possible to log in every day to check everything but also be emotionally detached from short term results.


It is NOT bad to keep an eye on everything daily to make sure everything is in order. However you must be able to make rational long term decisions, regardless of short-mid term results. It's the second part that is key.

masonic

InvestInPoker wrote: »

It's possible to log in every day to check everything but also be emotionally detached from short term results.


It is NOT bad to keep an eye on everything daily to make sure everything is in order. However you must be able to make rational long term decisions, regardless of short-mid term results. It's the second part that is key.

Perhaps if you can be sufficiently emotionally detached, it is possible to do so without letting what you see weigh on your mind. Do you think I'm being I'm being overly pessimistic in thinking many people would struggle with that? I did a lot of checking and worrying during the 2008 crisis and even though I didn't take any ill-advised action, I decided it was a big waste of mental energy and that it is much better to set aside some time periodically to review the situation properly. A little strategic ignorance over the short term helps with that.

Do you think it's necessary to log in every day and check everything is in order?

InvestInPoker

masonic wrote: »

Do you think I'm being I'm being overly pessimistic in thinking many people would struggle with that?

No I don't think you are being overly pessimistic at all, I have grown to be very emotionally detached from financial swings, provided I know I am being rational and doing the right thing. I also always know precisely what I am potentially getting into before starting something. I agree with you it is not normal to be that detached. We are all human after all. However it is possible.

Do you think it's necessary to log in every day and check everything is in order?

Necessary is not a word I used. It is however prudent provided you do not get stressed or jubilant over investment movements - and absolutely without question reduces the chances of a hacker successfully stealing my money or a clerical error going unnoticed. I do not believe any fund platform that I know of provides adequate security.