I recall hearing family psychologist Dr. John Rosemond speak years ago about what he called “Frantic Family Syndrome”. This is where parents and kids are engulfed in seemingly never-ending activities, while thinking more activity is better. Most of us learn this isn’t so. The same idea applies to our investment portfolios. Financial science teaches us that constant tinkering and tweaking can actually be destructive to our long term financial goals.
Here is a link to an excellent article by Jim Parker of Dimensional titled “The Art of Letting Go“. He makes several worthy points about “busyness” and all the problems this brings for the investing process.
An under-appreciated side issue connected to “over-activity” within investment portfolios, is how susceptible this makes us to investing via news headlines or investing in fads. Brokers and insurance salespeople are excellent at marketing these fads which often turn out to be expensive and ill suited. As Jim Parker says in his article, “non-doing” can be a valuable trait .
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