Next week I’ll make my monthly individual 401(k) contribution, just like last month and the month before that. And (because it’s a brokerage account and not a traditional plan) I’ll review my portfolio’s allocation and add to an ETF or two where I’m underweight.
Next month I’ll do the same thing, just like the month after that and the one after that.
Some days this is just so excruciatingly boring I can barely stand it. I never get to do anything new. I never find some exciting stock or fund to buy. I never get to tell a great story over beers about the great trade I made in my account that week. I don’t have a new painstakingly crafted white paper to defend some exotic currency trade I just put on.
There are days that I really wish investing was more interesting (“things people only say in bull markets” I know). Honestly, I feel the lure of throwing some money at an interesting strategy just like you. I have smart friends in this business doing interesting stuff with quantitative or qualitative valuation metrics and momentum strategies. I hear the stories of the guy who dodged the Valeant bullet or “just knew” that owning the private prison operators was doomed to fail and I feel the little tug of jealously. I’ll read a well-crafted white paper with an incredible backtest based on some thoughtful, sensible metrics and wonder why in the hell I’m not doing that.
Then I have to remind myself of the same thing I am always telling clients. You have a plan for a reason. And the only good that plan is ever going to do for me will happen if I stick with it. If I want the portfolio to grow faster, the best thing I can do is focus on putting more in it, earning more or spending less or both. And recognize that the whole point of the plan is to keep me from chasing down some bright idea when I feel the inevitable tug.
Bason Asset Management 