Author Topic: Charting your investment progress  (Read 601 times)

the barefoot badger

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Charting your investment progress
« on: March 15, 2019, 02:34:44 PM »
I'm having one of those days when it feels like someone disconnected something in my head, sorry.  I usually make spreadsheets for myself but for some reason I just can't wrap my mind around this.  When you chart your long term progress regarding investments, do you use the current day value?  Or do you have some other criteria?  Fidelity will tell me the current value of what I have, but since it's nebulously floating up and down from day to day and I'm not necessarily planning to sell anything, I'm not sure this is really of any use to me in getting a sense of whether my net worth is actually increasing / whether my choices have actually improved the long term, overall value of the portfolio. Knowing I "earned" or "lost" $4,000 since yesterday when I haven't actually done anything just gives me a perpetual rollercoaster of useless emotion. Do you just track how much you put in, and not worry about how much it's "worth" at any particular moment?  Or maybe track the number of shares you own, not their current value???

wenchsenior

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Re: Charting your investment progress
« Reply #1 on: March 15, 2019, 02:41:32 PM »
I'm having one of those days when it feels like someone disconnected something in my head, sorry.  I usually make spreadsheets for myself but for some reason I just can't wrap my mind around this.  When you chart your long term progress regarding investments, do you use the current day value?  Or do you have some other criteria?  Fidelity will tell me the current value of what I have, but since it's nebulously floating up and down from day to day and I'm not necessarily planning to sell anything, I'm not sure this is really of any use to me in getting a sense of whether my net worth is actually increasing / whether my choices have actually improved the long term, overall value of the portfolio. Knowing I "earned" or "lost" $4,000 since yesterday when I haven't actually done anything just gives me a perpetual rollercoaster of useless emotion. Do you just track how much you put in, and not worry about how much it's "worth" at any particular moment?  Or maybe track the number of shares you own, not their current value???

I record all our spending daily, and the value of our investments/net worth monthly (I just take the value given on the first of each month).  However,  I'm one of those people that gets MUCH more motivated by seeing actual graphs of progress, so this works great for me.  People are all different, so I think the best thing when tackling any change that requires self motivation is 'hacking' what works for you.  Many people are motivated more by outside accountability, some are intrinsic goal setters, some need visible evidence of their progress, etc.
« Last Edit: March 15, 2019, 02:44:24 PM by wenchsenior »

the barefoot badger

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Re: Charting your investment progress
« Reply #2 on: March 15, 2019, 02:51:32 PM »
I agree with you, I like seeing tangible progress on a chart.  So you take your lumps regarding the month-to-month value of the investments?  Doesn't that feel very negative when the market is having a slump; like you haven't actually accomplished anything?

solon

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Re: Charting your investment progress
« Reply #3 on: March 15, 2019, 02:56:41 PM »
I check my networth once a month. I record the daily values on that day. When you look at a chart of month-to-month values you can see longer-term trends without having to see the daily fluctuations which are really meaningless.

It's also pretty important to leave emotions out of it. The stock market goes up - and the stock market goes down. Both are expected. Whether it's up or down right now just doesn't matter in the long run.

wenchsenior

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Re: Charting your investment progress
« Reply #4 on: March 15, 2019, 04:35:12 PM »
I agree with you, I like seeing tangible progress on a chart.  So you take your lumps regarding the month-to-month value of the investments?  Doesn't that feel very negative when the market is having a slump; like you haven't actually accomplished anything?

I don't mind the dips at all.   But then, I'm one of those people that feels happy when the chart dives b/c I'm buying cheap stocks, and happy when the chart goes up b/c our wealth is growing.  In the recent correction, we lost considerably  more actual $ on paper than we lost during the Great Recession (when we lost a third of our worth on paper).  It's a big drop on my graph, but emotionally speaking, it just felt like a teeny little blip b/c I've been tracking so long. 

But I've been charting for close to 20 years.  The more years in, the more enthusiastic I feel. Admittedly, during the first 5 years, when everything was growing soooo slowly, the bumps in the road hurt more.  But now, the only situation I could see feeling much pain about normal stock market corrections would be if we happened to hit a major recession right as DH and I were retiring.  The key there would be to have a proactive plan to get us through that, so it wouldn't be such a bummer.

Generally, I try to remove any emotions stronger than satisfaction from investing.

MustacheAndaHalf

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Re: Charting your investment progress
« Reply #5 on: March 15, 2019, 07:38:46 PM »
The investing term "charting" usually means people who invest based on price history of investments.  When they see a low point, a surge to a stable level, and then a return to the low point, they say this is a "head and shoulders" and they invest based on how they interpret it.  So "charting" has some additional meaning when we're talking about investing.  I don't use "charts" in the sense of price history.

I actually think the relative percentages of my investments is the most critical thing.  So I use Google Sheets to show me what percent in bonds, in stocks, in international versus domestic stocks, etc.  A more detailed page shows the need for rebalancing, in dollars and a percentage.  My goal becomes keeping it balanced, which in turn maintains the level of risk that I set up.

When curious, I use Vanguard's tools to tell me my portfolio's performance (YTD, last year, 5 years, etc).  I also occasionally run "Portfolio Watch" to see which risks I'm taking by allocating differently than the total stock market.  I prefer to see those risks, rather than be unaware of them.