AAII Journal Editor Charles Rotblut Featured in WSJ’s “The Best Financial Advice I Ever Got”

Yesterday, editor of the AAII Journal Charles Rotblut was one of the featured financial experts in The Wall Street Journal’s article “The Best Financial Advice I Ever Got.”

His contribution reads: “Don’t look at your 401(k) statements. ‘Never open one of your 401(k) statements from the day you start work to the day you retire, 40 or 50 years later. When you open that last statement, never having looked at it along the way, you are not going to believe how huge it is. You should have a doctor standing by in case you faint or have a heart attack.’ That was the advice John Bogle gave me in 2014.

Admittedly, I viewed Jack’s guidance through the eyes of someone incurring confirmation bias, the tendency to give more weight to information backing one’s own views. I had started to become a believer in the ‘out of sight, out of mind’ adage back in 2006 after coming across, of all things, an International Journal of Obesity study about office candy bowls. The study’s authors found that secretaries consumed less candy when the bowls were opaque and placed away from the desk. By merely making the bowl less visible and putting it out of reach, the temptation to act was reduced.

I’ve applied the same logic to my retirement account, by only looking at it twice a year. Doing so effectively keeps it out of sight and out of mind. Even when I do access the account, I try to look at the balance as little as possible and instead focus on the allocation. My sole goal is to see whether the portfolio needs to be rebalanced. If all of the funds are relatively close to their targeted allocations, I do nothing and don’t look at the portfolio again for another six months.

By not looking at my balance frequently, I forget what it is. I don’t see its highs or lows. This means I don’t get euphoric when the markets are sending the value of my funds upward or saddened when the market pushes them downward.

It’s an approach I think Jack would describe as a step in the right direction, though he’d probably say that I’m still looking at the account too much.”

You can read the full interview with John Bogle that Rotblut references above here.