'I feel like a loser': I check my ETFs every day. They're up one minute, down the next. Should I be worried?

By Quentin Fottrell

'I presume these are sophisticated investors taking a profit'

"I haven't made any money in months." (Photo subject is a model.)

Dear Quentin,

I'm frustrated with the stock market. One day, my exchange-traded funds go up the next day, and the next day they crash. I presume these are sophisticated investors taking a profit. I haven't made any money in months. No yield at all. What to do? I feel like a loser. It would have been nice to be able to get a yield. Is anyone else having this experience? What strategies do you suggest for someone who is slowly and gratefully heading toward retirement?

Retail Investor

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.

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ADHD is on the rise, which mental-health experts attribute, at least in part, to our personal technology.

Dear Investor,

ETFs are traded throughout the day, but transparency does not equate to volatility.

Yes, they will fluctuate on any given day, week or month, as the news cycle pushes and pulls your stocks three ways from Friday. Yield, for the record, is also different from return; it represents the income generated - like interest and dividends - while return refers to the overall net gain/loss. Technology is all turning us all into checkaholics. We're up there with chocoholics. We want instant gratification, whether it's a boost of dopamine from checking ETFs, or a sugar rush from eating candy. If checking your portfolio is making you anxious rather than helping you make better decisions, STOP checking your accounts.

Focus instead on the long-term trajectory, which historically has tended to rise over decades. Forget about investors making money off microtrades. You don't need to beat those investors. Forget about them; they have nothing to do with you. Checking daily moves in your accounts gives you an inaccurate or, at the very least, incomplete outlook about the stock market's overall health. Here's a reality check. The S&P 500 SPX has risen roughly 14% from January to October, the Nasdaq COMP composite has increased by 18%, the Dow Jones Industrial Average DJIA has risen by more than 6% and the Russell 2000 RUT has increased by 13%.

Your anxieties are understandable. The geopolitical backdrop - the war in Iran, Russia's invasion of Ukraine and U.S. President Donald Trump's trade war - has spooked investors and led to fears of a recession, none of which have come to fruition. Occasional check-ins are fine. As you get older, the share of your portfolio invested in stocks typically changes to reflect the time you have to recover from a major correction in the markets (the "sequence of return" risk). That risk is particularly important in the years just before and after retirement: A large market decline early in retirement can damage your portfolio more than a similar decline happening many years later.

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Seeking safety

A few broad strokes: Explore CDs and high-yield savings accounts (HYSAs) for safety, but you may have to sacrifice higher returns. Treasury securities and high-quality bonds can also play a role. You say you are concerned about yield/return. That's understandable. In that case, you should decide how much of your portfolio you want to devote to predictable income, especially if you're upset by the movements in your account, and how much you still need to invest for long-term growth so you can enjoy a comfortable retirement.

There are also psychological and behavioral reasons why incessant checking of your portfolio occurs - and why it can be counterproductive. Loss aversion, a term popularized by Daniel Kahneman and Amos Tversky, describes the tendency for people to experience the stress of a financial loss more intensely than the pleasure of an equivalent return on your investment. As a result, you may be inadvertently conditioning yourself to constantly monitor your Robinhood, Vanguard or Fidelity accounts. It's a toxic feedback loop!

Possibly of more interest to you, given your obsessive checking of our own portfolio: Shlomo Benartzi and Richard Thaler developed the concept of "myopic loss aversion," suggesting that the more often you check your portfolios, the more likely you are to notice short-term declines and also react emotionally to them. That's why people sell their stocks in a panic during a market correction and/or go heavy in gold, dive headfirst into bonds and cash vehicles instead, only to regret it later. Don't make a decision on Thursday because of what happened on Wednesday.

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Risk perception

Since you ask about strategies for alleviating risk or the perception of risk: First, take stock of what you actually own and when you'll need the money. If you're overly concerned about short-term movements in your portfolio, you could employ a dollar-cost-averaging strategy, where you divide the amount to be invested in vehicles - be they Treasuries or CDs - into equal-size contributions and invest them over a longer period. Dollar-cost averaging, for example, can make sense when you're investing new money and want to reduce the psychological discomfort of investing a lump sum.

A "bond-tent strategy" involves gradually exposing your portfolio's allocation to bonds in the years leading up to retirement, keeping a higher bond allocation early after retiring and gradually lowering that exposure later. The idea is to create a buffer against needing to sell stocks after a major market decline early, especially early in retirement. It can reduce your sequence-of-returns risk. As long as you have enough money to live on, plus a 12-month emergency fund, it's also worth figuring out how long your retirement savings will have to last and how much you expect to withdraw each year.

A "bond ladder" of individual CDs or bonds, on the other hand, matures at different times and can provide a more predictable income stream while reducing the need to sell investments at a bad time and reducing exposure to interest-rate and stock-market moves. A ladder can be useful if you know roughly when you'll need the money. Whatever you choose, your portfolio should have an age-appropriate mix of stocks and bonds, and cash equivalents. The right mix depends on your spending needs, other sources of income, your time horizon and - yes - your tolerance for risk.

Constant checking creates unnecessary drama. Sometimes, it's better to pick up a good book.

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Check out The Moneyist's private Facebook group, where members help answer life's thorniest money issues. Post your questions, weigh in on the latest Moneyist columns or email The Moneyist on qfottrell@marketwatch.com.

More columns from Quentin Fottrell:

My wife never went back to work after raising our kids. Do I have to share my retirement savings 50/50?

'People in the U.S. need to wake up': As a mortgage loan officer, I rejected applications from wealthy couples. Here's why.

'I don't want to die on the sales floor': I'm 67 and earn $19.50 an hour at a big-box store. When can I finally retire?

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-Quentin Fottrell

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10-09-26 1430ET