I have written about how investing* is really about growing your share ownership; that is, growing the number of shares you own of any given fund over time. Writing about this has helped me shift my own perspective from mostly focusing on the current balance of the fund (or portfolio).
My first five years of investing were 2015 through 2019. These were easy years to watch the balance grow. It was basically like watching your favorite sports team keep winning. There was very little drama (despite a few exceptions), and volatility tended strongly in the upward direction. This made the game of watching the balance really FUN!
The constant volatility of the market in 2022, on the other hand, has been a slog. Watching our portfolio balance this year as it shrank (or at best flat-lined) has, well, mostly sucked. It has been like watching your sports team be dead last (or near it). After all, we’re looking at across-the-board losses of 20%+ for equities, and 15%+ for bonds (even the total bond fund, which was thought to be safe from such losses). In fact, our Personal Capital dashboard says that as of yesterday our total portfolio has dropped 23.39% this year. Yikes!
In this environment, thinking of growing our share ownership instead of focusing on balance has been useful. And I am reassured by knowing I can tolerate the volatility . I can look but I’m not touching! At worst, I feel slightly annoyed or fatigued by the current market environment. But I’m well-versed in age old investing mantras: “This is the price of success” and “I’m in it for the long haul,” and “it’s time IN the market that matters.” And I still appreciate buying on discount. I feel just as committed to our investing program as ever. I’m still enthused, and eager to see what will happen next.
That doesn’t stop the recent trajectory from sorta kinda being a bummer 🙁
*For the purposes of simplicity, I’m defining investing here as buying index funds, though it could equally be applied to buying individual stocks.