This is the fourth in a seven part Las Vegas themed series, “What Las Vegas Can Teach You About Your Personal Finances”. In case you did not know, this week’s posts are brought to you directly from Las Vegas, Nevada where I am, like everyone else who comes to the glittering city in the desert, currently on a mission to maximize my investment and minimize my losses on the felt.
I noticed a bad habit that I had the other day at the casino in Las Vegas. When I sit at the blackjack table, I am constantly checking to see how many chips I have in front of me. I always seem to be stacking them and restacking them. I stack the $5 chips in piles of $25. I am constantly checking to see if I am up or down and by how much. Watching my bankroll grow and dwindle is not healthy.
I often find myself watching the stock market the same way, and many people do the same thing. It is not healthy to constantly watch the ebb and flow of the stock market. CNBC burst onto the scene in 1989, and the average stock investor has never been the same since. Now it is too easy to get wrapped up on how well or how poorly your investments are doing. CNBC is seen daily by more than 340 million homes worldwide, including more than 95 million households in the United States and Canada.
Sometimes watching real-time financial market coverage and business information is interesting, and other times it can be distracting and bad for your financial health. You should ignore the stock market. Hopefully, you are a long term investor and practice buying and holding your investments. So, it should not matter to you what the stock market does. If the market does down, then you should be indifferent. I am so far away from retirement that I actually like big market corrections because I can buy a lot of stocks and mutual funds at a cheap price. Don’t get me wrong, I feel horrible when the market crashes for those who are so close to retirement like it did in 2008, but it is actually a very good deal for stock buyers who have a long time to wait until retirement.
Investing legend Warren Buffet often says that he does not know where the market is headed in the short term and that he does not care. But, he is confident in the stock market over the long term, the very long term. We should all be long term investors. There is too much volatility and emotion wrapped up in the short term. Focus on being an investor and not a trader. Investors look way out to the horizon and do not get wrapped up on how the stock market and economy is doing today.
This is the fourth of a seven part series of what Las Vegas can teach us all about personal finance. Check out the others in the series below…
- Post #1 – Invest In What You Know
- Post #2 – You Need Perseverance
- Post #3 – Know The Rules Before You Start
- Post #4 – Do Not Watch Your Bankroll (The Market)
- Post #5 – Know Your Risk Tolerance and When To Stop
- Post #6 – Do Not Gamble More Than You Can Lose
- Post #7 – Know When You Are In Over Your Head
Just to be clear….in no way am I advocating gambling. If you think that you may have a gambling problem, you should find help as soon as you can. There is help available. You can find help andresources at the Gambler’s Anonymous website, the National Council on Problem Gambling, and the National Center of Responsible Gaming.