While You Sleep…

While You Sleep… (CATEGORY: AFTER)

Everybody has to sleep, but in our twenty-first century world we understand that networks, businesses, governments, the internet, social media and so on, never really go to sleep.  When one market is closed on this side of the globe, another is opening half-way around the world.  We accept all of this kind of activity as normal.  But sleep remains a critically important function for humans, and believe it or not, it also is a key ingredient to successful Cookbook Investing.

Constant Monitoring…

One of the habits that new investors frequently pick up is the “constant monitoring” habit, which is where the investor has their phone in their hand all day and is constantly watching markets and even individual stocks.  If you have a PC at work, and a tablet at home, this could go on with multiple devices.  Usually, the habit grows to include news alerts for certain stocks, research applications that you can lose yourself in for a long time looking around, and perhaps multiple competing portfolios to watch or pit against each other in competition.

Most investors gradually move out of “constant monitoring” (although some take the cold turkey approach and drop it completely, similar to closing all of your social media accounts) and enter the next phase of cooking in the kitchen, which is to spend some time each week monitoring and researching, but also letting it go for hours, days, or even a week or two.

Something has to Give…

The manic stimulation of “constant monitoring” can be intoxicating, but it also can become frustrating.  You have to sleep sometime, right?  And while you sleep markets still surge up and down, companies fail and succeed, and portfolios grow and contract.  And it happens whether you are awake or not.

Sleep is a metaphor for what Guy calls patience and endurance.  Cookbook investing is a marathon, long-term commitment and not a one-off birthday cake made by the Grocery Store that everyone thinks you made.  In the same way that your body must have sleep, your portfolio must rest at times, too.  Although “playing” with a portfolio can be fun (and should be), there has to be an off switch where it can do its own organic work in tandem with all of the other things that don’t go to sleep.

Conclusion…

When you sleep, your main bodily functions continue.  While your portfolio sleeps, its main functions continue as well.  When you sleep, some of your more finely tuned bodily functions are refreshed and improved for the day ahead.  In a similar way, when your portfolio rests it won’t look quite the same when you come back to it; not only will you see it with fresh eyes, it will have rested long enough that there will be new information to process (unlike the kind that is temporal and distracting with “constant monitoring”).

You’re probably heard the phrase, “Give it a rest,” or “Give me a break.”  It might sound funny, but sometimes your portfolio needs to sleep, too! You Sleep… (CATEGORY: AFTER)

Everybody has to sleep, but in our twenty-first century world we understand that networks, businesses, governments, the internet, social media and so on, never really go to sleep.  When one market is closed on this side of the globe, another is opening half-way around the world.  We accept all of this kind of activity as normal.  But sleep remains a critically important function for humans, and believe it or not, it also is a key ingredient to successful Cookbook Investing.

Constant Monitoring…

One of the habits that new investors frequently pick up is the “constant monitoring” habit, which is where the investor has their phone in their hand all day and is constantly watching markets and even individual stocks.  If you have a PC at work, and a tablet at home, this could go on with multiple devices.  Usually, the habit grows to include news alerts for certain stocks, research applications that you can lose yourself in for a long time looking around, and perhaps multiple competing portfolios to watch or pit against each other in competition.

Most investors gradually move out of “constant monitoring” (although some take the cold turkey approach and drop it completely, similar to closing all of your social media accounts) and enter the next phase of cooking in the kitchen, which is to spend some time each week monitoring and researching, but also letting it go for hours, days, or even a week or two.

Something has to Give…

The manic stimulation of “constant monitoring” can be intoxicating, but it also can become frustrating.  You have to sleep sometime, right?  And while you sleep markets still surge up and down, companies fail and succeed, and portfolios grow and contract.  And it happens whether you are awake or not.

Sleep is a metaphor for what Guy calls patience and endurance.  Cookbook investing is a marathon, long-term commitment and not a one-off birthday cake made by the Grocery Store that everyone thinks you made.  In the same way that your body must have sleep, your portfolio must rest at times, too.  Although “playing” with a portfolio can be fun (and should be), there has to be an off switch where it can do its own organic work in tandem with all of the other things that don’t go to sleep.

Conclusion…

When you sleep, your main bodily functions continue.  While your portfolio sleeps, its main functions continue as well.  When you sleep, some of your more finely tuned bodily functions are refreshed and improved for the day ahead.  In a similar way, when your portfolio rests it won’t look quite the same when you come back to it; not only will you see it with fresh eyes, it will have rested long enough that there will be new information to process (unlike the kind that is temporal and distracting with “constant monitoring”).

You’re probably heard the phrase, “Give it a rest,” or “Give me a break.”  It might sound funny, but sometimes your portfolio needs to sleep, too!