This week wasn’t the best week in terms of investment gains. The Dow lost 3.63%, the Nasdaq lost 2.75%, the S&P500 lost 2.68% and the Mergent’s Dividend Achievers lost 2.75%. Pretty much all down for the week. As a comparison, my portfolio (according to Microsoft Money) was only down 2.2%. I guess I did better than all the indexes, which is a good thing, but not something I worry about too much. At least on such as short-term basis.
Ginsberg over at The Earning Curve talks about how often he checks his portfolio. I used to do that but it drove me crazy. I even found that I was making irrational decisions because of it. I was so obsessed with my performance on a daily basis that if things went down for a day, I had a tendency to react and either sell or buy something, without really thinking too much about it. I have since stopped watching it so closely. That is not to say that I don’t monitor my portfolio, I just do not fret about the day-to-day price changes that happen and get too worked up about it.
Here is how I monitor my portfolio. There is nothing fancy about it and most of all, it doesn’t take me a crazy amount of time:
- Every quarter, I compare my returns to the S&P500 index and the TSX index (in Canada). My goal of course is to beat it, but if I am under it but close I don’t worry about it too much. I do analyze my allocation and performance of individual stocks to see if there have been any trends over the past few quarters. If so, then I will come up with a course of action (which usually is to sit tight).
- Keep track of the news results, especially quarterly reports, for each one of my holdings. I am not pouring over the reports, just scanning them looking for key items that may be of concern.
- Every year, I rerun each holding’s numbers in my Shareowner’s Association software package to make sure everything is trending in the right direction in terms of fundamentals. I keep each year’s results in an electronic file so that I can compare my results year over year.
That is pretty much it – nothing too complicated or time consuming. I enjoy doing it. If I didn’t, I would most likely just buy some index funds and let them coast.
P.S. Pretty good week for dividends – received dividends from both Coca-Cola and Merck. These dividends are awaiting re-investment into more shares of each stock on the next purchase date at my broker.