Is a more observant investor necessarily better?

Frequently I hear participants in our retirement plans say that they feel they should "pay more attention". What they frequently mean by this is they should look at their 401K website or statements more and make more changes. Change for the sake of change isn't necessarily a good thing.

The deeper and more frequent people check their account, the more nervous and anxious I find them to be. They also are more prone to make mistakes. If I looked at my account on July of 2018 and then October of 2018, I felt like I was doing horribly. If I popped back in to take a look in October of 2019 and compared that to January of 2020, I would be downright depressed. Now if I never bothered to check and I had looked at things in July of 2022 versus today, I would probably assume that I am a genius.

The point is the time frame matters. Stocks tend to go up on average about three out of every four years. If I am a twenty something who has only been investing for a few years, I probably feel like I can do no wrong. If I am in my mid-50's, I am wise enough to know that stocks also go down and can for a prolonged period of time.

When I hear a participant say they want to be more engaged, I encourage them to focus on those things in their control. Budgeting and savings rate being the most important variables of all. If those same investors spent energy on improving savings rates into plans, that would always be more fun and meaningful to their end result than focusing on the sequence of returns that they can't change.