In 1881, a small piece of advice circulated among investors trying to make sense of Wall Street. It had nothing to do with which stocks to buy or when to sell them.
“To see and comprehend the market,” it said, “you must always stand off at a distance.”
The reasoning was simple. Stand too close to the crowd and you’d be swept into what they called a “state of semi-insanity” – doing something you’d despise yourself for the very next moment. The only cure was to physically walk away.
That was written nearly 150 years ago. Now the stock tickers and trading floors are long gone. But the advice hasn’t aged a day.
Here’s something that sounds wrong but isn’t.
In almost every discipline, more time spent means better results. You master the piano by sitting at the keys. You improve at golf by practising the basics. You build a business by understanding your customers better than anyone else.
Investing is one of the rare exceptions. More attention frequently leads to worse outcomes.
Research consistently shows that investors who check their portfolios more often trade more frequently, react more sharply to losses, and end up with lower returns over time than those who maintain a healthy distance. The data on this is remarkably clear.
The reason is that the human brain wasn’t built for long-term financial planning. It was built to respond to threats. And when markets fall, every instinct you have tells you to do something – to act, to protect, to move. That instinct kept your ancestors alive on the savannah. In a portfolio, it’s the single most expensive impulse you can follow.
The tricky part is that caution feels responsible. When panic spreads and everyone around you is frightened, fear seems like the rational response. Doing nothing feels reckless.
But doing nothing is almost always the right answer.
This is the great paradox of investing. The moments that feel most dangerous are rarely the moments that are most dangerous to your long-term plan. The real danger is the quiet, invisible one – the slow erosion caused by reacting to noise that didn’t matter.
In 1881, standing at a distance meant physically walking away from the trading floor. Today, it requires something more deliberate, because the noise doesn’t wait for you to seek it out. It finds you – on your phone, in your inbox, across every headline.
If you accept the truth that more activity often leads to worse results – and most experienced investors have learned this the hard way – then the responsible thing to do is make it harder to hear the noise in the first place.
For some people, that means checking their portfolio quarterly rather than daily. For others, it means turning off the app that shows market movements, or simply ignoring the station that runs daily market commentary.
Distance doesn’t have to be physical. Psychological distance works too. When headlines turn negative, remind yourself of the actual timeframe that matters to your life. A thirty-year plan doesn’t need daily scorekeeping. And the less frequently you measure results, the more clearly you see the trajectory that actually matters.
The 1881 advice concluded by recommending patience, discipline, and thoughtful composure. Nearly a century and a half later, not a word of it needs updating.
In an age where information is in no short supply, knowing more will never be your advantage. The only lasting advantage is the ability to remain calm when others are frantic.
Financial markets and the great companies of the world have always rewarded investors who can resist the urge to react to short-term noise. We see no reason why the next thirty years will be any different.
Our role isn’t to add to an already noisy world. It’s to understand your situation, your goals, and what matters to you – and help you build a strategy that lets you stand at a distance with confidence.
Until next time,
Hazel Scarff
Chartered Financial Planner
