Hi my name is Phoebe and I have a problem. I'm addicted to my spreadsheet. Every day I check all of my account balances, and when I have the time I check our stock prices throughout the day. Sometimes this works in my favor as I quickly notice when anything is wrong with one of my accounts, but this month I saw just how damaging this behavior can be.
At one point this month our net worth was up about $6K more than it is right now. I giddily entered these new values in my spreadsheet and saw how my monthly and yearly predictions increased accordingly. All of a sudden I had dreams of hitting our goals much earlier than I thought possible, and I was extrapolating these results out through years to come.
But then yesterday the market dropped and we went down about $4K and another $2K today, and I felt dejected. I had to update my future predictions, and come to terms with the fact that I wouldn't actually hit my goals as early as I anticipated. My emotions were ebbing and flowing with the market changes, and it was simply exhausting.
It's a psychological fact that for most people losing money is far more painful that missing out on potential gains, and I definitely fall into that category. I wind up beating myself up when nothing that I can control causes the markets to dip, and in truth there is something that I can do - stop paying attention to them.
What if I hadn't checked my balances throughout this month? Instead of feeling dejected that I lost $6K I would feel elated that we had gained $15K. And I would have a more balanced view of how our money is working for us. The danger with focusing on the daily swings is that I can start to feel like the market is extremely volatile (and maybe it is) and am tempted to pull our money out immediately. I need to instead see how my money is being managed overtime and change my strategies as required.
So far I've managed to stay the course despite losing large sums of money at times, but I'm trying to prepare myself for the day that instead of losing $4K we lose $40K. As we continue to invest in the market this is going to happen, and I hope we have the stomach to ride it out using dollar cost averaging.
The first step I'm going to take is to stop updating my spreadsheet daily. There really is no need for me to update it more than monthly, and so I'm going to start my spreadsheet fast in February.
Wish me luck!