Mini Episode 21 - Why have I stopped (compulsively) checking my investments?

Jonathan from Lightsview wants to know why he's suddenly less invested in investing

Dan: (00:18)
And welcome to another episode of bad decisions. We're still rolling through this mini episode format, trying to get to the bottom of your weird and wonderful questions about interesting human behaviours. Today's question comes to us from Jonathan in Lightsview.

Jonathan: (00:32)
I used to look at my stocks every day, but now I only check them once a week. I've even hidden the app on my phone. Why have I stopped checking my investments?

Dan: (00:40)
Oh, this one, this one feels real Jonathan, especially this week. Uh, but Hey, let's, let's talk about it. Right? So the day trading slash commodity trading slash cryptocurrency trading game, you know, it is a wild ride Jono, but you already knew that didn't you, you and the 9 million other Aussie investors who truly understand the thrill of the short, the rush of an exotic derivative or the pure unadulterated joy of using your ledger to buy NFT with ether no wonder you've been hitting refresh like a sneaker head on drop day until now, of course see how things are different that folder on your home screen. The one that got all the action in the last 12 months, eh, it's looking a little lonely now, isn't it sure. You're probably just too busy to check where things are at these days. So maybe you've realised that logging in at the wrong time can jinx your balance, which is totally possible, but you know what else is possible?

Dan: (01:27)
It's possible that the smoke alarm batteries will magically recharge themselves, that your sore tooth will fix itself. And that at some point, that weird smell will just kind of go away. Right? Well, let's dig a little deeper today. We are talking about the ostrich effect, which refers to our tendency to avoid negative information. Instead of facing the facts we choose instead to bury our heads in the sand, which fun fact OSTs don't actually do by pretending that the information doesn't exist, we get to hide from the fall out of any bad news and avoid all those unpleasant icky feelings. We fight so hard to keep at bay. The seminal ostrich effect study comes from Carlson Stein and CEPI in 2009, as the world entered a deep financial crisis, the teams did out to study how often investors check the health of their portfolios over a four year period.

Dan: (02:!4)
The researchers found that daily logins were consistently and significantly higher following good news. The market's gone up pre compared to bad news. The market's gone down, Ooh, rationally having the most up to date information, no matter how good or bad helps us make better financial decisions. Emotionally though, it's a different story. Why get reminded about the 150 grand you lost before breakfast? If you don't really have to be for product and services that customers would rather ignore think financial counseling, weight, loss products, prepaid funeral services. You can look at ways to demonstrate how avoiding the issue will actually be far more problematic than confronting it beyond this brands can reframe negatives as positives, removing the I factor and improving permissibility. So think about the impact of switching out guidance through bankruptcy, with achieving financial independence, same service, completely different feeling. No ostrichs required. So there you have a Jonathan that is at least my take on why you have stopped compulsively, checking your investments. Uh, but chin up, they say it's a long game hanging in there. And if you feel like it flick me some Bitcoin, if you don't wanna flick me some Bitcoin, the other thing you can send my way is your questions about weird and wonderful human behaviors. If you've seen something and would like to know what is driving it, shoot it through to me. You can get me all over the internet at Dan Monheit or via email askdan@hardhat.com catch you on the next one.