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Don’t Check Stock Prices Every Minute
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When I was in elementary school, we played a stock market game in which each team was given $10,000 to invest over the course of a month. It was about the time of the first Gulf War, when Iraq invaded Kuwait, and someone on our team suggested we purchase shares of Caterpillar. Then, as the days would pass, we’d review our copies of the New York Times business pages for the closing price of the stock the previous day.
That’s right… we checked the newspaper and saw only the closing price from the night before. No after market trading, no level 2 market data – none of that stuff. We were only eleven and it would be many years before you could even get real time data (everything was 20 minutes delayed, unless you paid).
The deluge of stock information only serves one purpose – increased activity. That’s why I thought it was funny that this story about a Google glitch on Apple’s ticker was even a story. The sad part is that as you watch it tick down, you don’t know if it’s a glitch or a flash crash.
If it’s a glitch, you won’t freak out when you see it. If it’s a flash crash, you won’t freak out when you see it. If it’s a real crash, chances are you wouldn’t have beaten the computer traders, institutional experts, and all the other folks who are in line ahead of you… and you won’t freak out about it either. 
The lesson? Don’t check stock prices every minute.
(Photo: bransorem)
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I played a similar game in 6th grade and I remember checking the closing stock prices from the WSJ to figure out who was ahead. These days I try to only check my investments every few days. I’m not an active trader and I know I can’t beat the computers anyway.
It can be fun to watch prices when a major news story breaks – they often dip but are back up a week later. It makes me wonder what the value of active trading is unless you can be a fraction of a second faster than the rest of the crowd.
The flash crash was kinda cool… I had some Good-Til-Cancelled orders in at low prices, and one of them hit (just wish I had entered more orders like that).
I used to purchase individual stocks (and might again in the near-future since we are now out of debt), but I would literally check them at least once every hour! I was obsessed.
Now that most of my investments are through my company’s savings plan, I don’t look at the market every minute. It’s much more peaceful that way.
I check stocks more often than I should, but at this point, the changes, no matter how big or small, don’t really have an impact. It’s now just a way to waste a bit of time.
I used to check portfolio value everday. I found it to be kind of depressing a few years ago so I just stopped. I wasn’t going to stop investing because of it so me checking the values didn’t serve any purpose.
You learned about the stock market in your elementary school? Kudos to the teacher and the school! I wish all schools would teach this kind of useful real-life material alongside the traditional subjects!
I wouldn’t go that far… I didn’t learn much except CAT was for Caterpillar.
Heh, I didn’t learn what those big capital letters were until college!
The Ohio Society of CPAs goes in to schools and plays a stock market simulation game. They have fake companies, but the concepts are the same. Every 10 minutes is a “new day” with new stock prices. Kids get to buy and sell stocks as well as track their earnings. I think we play with 5th graders. They all seem to get the concept.
This is the type of program I would implement in my schools if/when I become benign dictator of my own little country.
this is great! i also played a very similar game in elementary school. to this day, i think that was the main reason i found finance so interesting.