I just Made the Biggest Investing Mistake

… I got curious as to how my money was doing.

AND I CHECKED on my investment accounts.

The number one rule of investing is to NOT get emotional about the market or how your investments are during at that one moment in time. Since most people are not day-traders on the NY Stock Exchange, we should be playing the long term game: buy, hold, sell high. Well that is the ideal situation anyways.

I Just Made the Biggest Investing Mistake

Back to my mistake. I have been doing a test for first time investors, where I invested $500 in Betterment, Wealthfront, and Vanguard to see which investment vehicle does better. The robo advisor? If so, which one? Or, the traditional low cost index fund straight from Vanguard itself. So far, my journey has been quite promising. March proved to be a great time to invest and saw some returns already. Robos, while newer to the investment game, provide great convenience and low cost options to the investment world, as they mostly invest in index funds and are based on algorithms versus human predicament. For Millennials and those new to investing, they are a great option to get your feet wet and learn about how to invest – its really easy, I promise.

But I got curious and started thinking if I put my money in a good place. Doesn’t everyone have these thoughts? Recently, there have been some times where I have needed my emergency fund, and anytime I dip into that account, I re-assess how my finances are doing, including my investments.

I logged into all three accounts and crossed my fingers for some good luck. (Yes there is some strategy for my stock market investing, but some days you just have to hope your money is moving in the right direction).

Whew! I have still made money (a few dollars) – I am not always this lucky when I fall into the emotional investing trap. Regardless of where my money went, I am confident in leaving my money invested to let it grow. Historically, your money will grow when invested and I am relying on this principal.

Bringing emotions into your investment could cause you to lose out on long term gains or opportunities because you’re are letting your emotions make the decisions. With that being said, there is a level of risk that you have to be okay with when you take the step to invest and make sure that the investment (whether in the stock market or real estate) is something that you can stomach.

Now, I am not saying never assess and re-evaluate your investments. I have a spreadsheet where I keep a monthly update as to how my investment accounts are doing. I get a better visual to watch my money grow and can see my financial historical trends happening.

The worst thing you could do though, is see your money go down, get panicked and sell. The one thing that I have learned over time is that when you see stocks going down or “in the red” it only means that they are on sale and it is time to buy!

I just made the biggest investing mistake you could make, but I did not act on it. Regardless of which direction my money goes in, there will be a day where you see your money grow and that feeling will trump the worry any day. Don’t fall into the investing emotional trap where you continuously worry about how your money is doing all the time. Pick times that work for you when you can calmly and un-emotionally evaluate your investments.

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  • Alan

    There’s a great book called “100 Baggers” which is about selecting stocks that return 100 times your investment. The author studied hundreds of these companies (turns out there are quite a few 100 baggers) and concluded the average holding period to get these results was 25+ years.

  • Becky@frametofreedom

    We do this and we panic each time! It is scary to look at your money in the market because it goes up and down so often. Great article!

  • debtfreeoneday

    Yes – everything I’ve read about investing for the long haul says that you need to wait out the dips (and use them as an opportunity to buy more)!

  • Jamie

    I really try to pay no attention to our retirement funds. My hubby does keep an eye on them just to make sure nothing is totally tanking. But over time I’ve learned (as you said) that sometimes stocks are just on sale, and you’ve got to be patient!