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Am I Focusing Too Hard On Investments?

Since the beginning of this year, I’ve been focusing with laser-like intensity on the stock market… But I have to wonder if the extra time is worth it, or perhaps I am focusing too hard on investments!  It’s hard to draw a distinct line when it comes to making money.

There is a rule called “Pareto principle” that basically states that with 20 percent of your effort, you encounter 80% of your results.  So basically the more time you put into a situation, the less results you encounter.  When you put in a more time with less results, that’s called diminished returns.  And some people even claim that if you put too much time, the results actually go negative and you actually start to do damage to your goal.

RothIRAPerformanceSM

I think I might be at that point in time.  I’m thinking and putting in way to much time in the stock market, but the benefits are questionable.  Some things in life (like investing) requires time and patience.

I’m currently following the stock market like a hawk, trying to increase my returns.  My primary stock I plan to hold for at least 2 years, and maybe much longer.  Each day I’m checking up on the stock, reading the thoughts and commentaries about it.

But is that time really worth while?

Based the Pareto principle, it’s obvious to me that I’m putting way to much time into researching the stock.  I’ve done enough work to know that it’s a good investment, and the business model is such that it’s not a dynamic company that could be easily wiped out tomorrow.  It’s stodgy and predictable, so the extra time I’m putting into researching it, and watching the daily valuation of the stock price, is a total waste of time and life.  I could use the research time for new leads instead of watching my favorite stock.

All that I said above is true, and yet it is still so hard to “not” watch my favorite stock.

If you dabble in the stock market, do you find that you have similar issues?

Bests,

Don

5 Responses to Am I Focusing Too Hard On Investments?

  1. Firstgenamerican.com says:

    I am the opposite and wonder if I should spend more time. When is inception? When I get a chance and take a look at my numbers. At last 1/2 of my 401k is in a total stock market fund.

    • Don says:

      Inception in my roth ira’s account was 2009, so that’s why my inception return is so high. I was primarily trading bidu at the time and my return was much higher back then.

      Actually, based on previous experience, if I focus on just a few stocks that have legs, I usually do decently. It seems like I’m continually learning with stocks. As I get more money, perhaps it would make sense for me to ease back and purchase a few good etfs instead.

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