Want to make yourself miserable and then lose money because of a bad decision? Own a diversified mutual fund, and check the returns every day.
Want to make yourself happy and able to make the right decision? Own a diversified mutual fund, and check the returns once a month, or once a year.
This at least has been true over the course of the history of mutual funds, and the last hundred years of diversified holdings of stock. It might not hold true over the course of the next 100 years, or even 40, but the principal behind this is very instructive and amusing.
So how do we understand the difference between checking daily and monthly?
The first thing to understand is that loss hurts more than an equal gain feels good. This is something biologically hardwired into humans, and demonstrated in experiments. After that, simply realize that, the longer the time frame you are looking at the "smoother" the pattern, with less fluctuations. Let's say every day there is a 50/50 chance the stock will go up or down. If you check daily, then the losses are going to hurt more, stick with you more, and probably lead you to bad decisions. On, the other hand, lets say there is a 70% chance the market goes up month-over-month. In this case, the success rate will be high enough that you can overcome your loss-aversion bias.
I believe that most goals are like this as well. I cannot guarantee that each and every time I do a lift I will improve, but if I stick with a system, I have a really good shot of seeing improvement after a month.
The reality isn't any different, just I am just changing where I stop and compare results. The difference in terms of happiness is tremendous.
