Invest Better With Less Stress

If I asked you how the stock market was doing right now, what would you say? Totally awesome or on the edge of collapse? In pretty much every scenario I've lived through as an investor, the financial news consistently reports that we're at risk of a market pull-back or riding a bubble about to burst or a crash is right around the corner. The news is ALWAYS bad.

But imagine that someone had been off-planet for the last year and, now back on Earth, was finally able to look at their investments for the first time in a year. Guess what? Over the last year, the S&P 500 (a pretty good proxy for the stock market) is up about 13.5% – just above historical averages. So our space-faring friend who only checks investments once a year would probably think something like, "looks like my investments are doing pretty well!"

If you want to be a better investor and feel a lot better in the process, one counter-intuitive approach is to simply check your investment accounts less often. Like, a LOT less often – once or twice a quarter is plenty, once or twice a year is totally fine.

When you check your investments every day, you see all the little ups & downs. And humans have evolved to experience the pain of loss twice as much as the joy of gain. So even though the stock market tends to go up more often than it goes down, people respond more to the drops than the gains.

So checking your accounts less frequently means less opportunities to be bummed out. But maybe that feels ... irresponsible. If you care about your money, shouldn't you pay attention?

My answer is – kind of. Your money is important and I want everyone to consistently invest for more and better options in the future. But the more stress you take out of the process, the more likely you are to stick around for a long time. And that means you can enjoy every investor's biggest & best superpower: compounding growth.

Here's how it works: you invest an initial amount of money, which grows some amount in year one. Then in year two, both that original investment and that extra growth grow a little more. In year three the original money, the growth from year one, AND the growth from year two all continue to grow, and so on in that fashion for as long as possible.

It doesn't seem like a big deal at first, because compound growth happens exponentially – unremarkable to start, then dramatic growth the longer you continue. The extra growth on the previous growth starts to snowball and, after enough time, that compounded growth gets so big that it eclipses your original investment.

But there's the trick to making this work: you can only enjoy the superpower of compounding growth if you can stay invested for a really, really long time.

Therefore, it should be a priority of every investor to increase the chances of staying invested for a really, really long time. You can do that by a) choosing investments you could own forever, like low-cost index funds and b) using every trick in the book to take the stress out of the process.

One way to do that is to simply avoid checking your investment accounts all the time.

So if you want to be a better investor and feel a lot better about it, do yourself a favor and only check in every month or quarter or even year. You'll be surprised how much better it feels!

If you want to dig deeper into your investment risk, reward, and timeline, feel free to reach out by replying to this email or scheduling a low-stress intro meeting.

Thanks,

Timothy Iseler, CFP®

Founder & Lead Advisor

Iseler Financial, LLC | Durham NC | (919) 666-7604

Iseler Financial helps creative professionals remove stress while taking control of their financial lives. We'll help identify current your strengths and weaknesses, clarify and refine your long-term goals, and prioritize decisions to improve your financial well-being now and later. Reach out today to take the first step.