Excess Returns · Tuesday, September 8, 2026
Jared Dillian discusses how volatility in investment portfolios can negatively impact an investor's psychology, leading to poor decision-making. He notes that checking a volatile portfolio daily increases the chance of experiencing negative news, which can cause stress and lead to suboptimal actions.
“Volatility is the enemy. The purpose of volatility is to make people make stupid decisions. Yes.”
“The idea that the volatility forces errors of judgment on the market participants. That's part of the problem here, right? That's part of the problem that people are trying to figure out or should be trying to figure out how to deal with that.”
“So, if you check the price of your portfolio, if you check your balance, yeah, if you do it every day, 48% of the time, you're going to feel sad, right? So you want something that is not that volatile, so you don't check it, because when you check it, you get sad, and then you might do something dumb, right?”