Daily Stock Prices Are Completely Irrelevant

The day-to-day performance of stocks on the rise or fall is nearly indistinguishable.

| More on:
The Motley Fool

“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”

— Warren Buffett

Most investors have heard or seen this quote from the great Warren Buffett, but very few actually listen and heed his advice.

The availability of daily stock prices has drastically changed with the introduction of the Internet. What once was available mainly via newspapers has now become an inescapable and always-present reminder of one’s fluctuating portfolio.

Investors check stock quotes on everything from their online brokerages account to their jam-packed Twitter feeds. We’ve reached a point where one almost has to go out of his or her way not to see how their favourite stock or the market in general performed on a certain day.

To highlight the insignificance that daily fluctuations have on a long-term holding, let’s take a look two stocks that did very well in 2012, and two that didn’t.

Gildan Activewear (TSX:GIL,NYSE:GIL) climbed 89.6% in calendar 2012 but if all you saw was the chart below, you probably wouldn’t guess that such a big return was achieved.  Gildan’s stock was only up on 55% of the trading days in 2012.  Get ready to see this pattern repeated in all of our examples.








Thanks to a return of 63.4% in 2012, Catamaran (TSX:SXC) shareholders had a good year.  However, if they would have been watching Catamaran on a day to day basis, they would have seen the shares only go up 52.4% of the time.









Penn West (TSX:PWT) shares fell 46.5% in 2012, which is somewhat remarkable given the stock was only down on 52% of the trading days.

Penn West








And finally, Enerplus (TSX:ERF) fell 50.1% in 2012 although in terms of day to day trading, the stock was up nearly as often as it was down.









Eye-catching headlines and daily gyrations are fun to follow, but that’s about it.  To rise above the noise, when you’re making an investment, think like Buffet and assume you won’t be able to sell it for five years.  You’re likely to think differently about making that investment if it’s framed in this context.

We have created a special FREE report that profiles 3 companies that you can buy today and never have to worry about selling.  Simply click here and we’ll send you “3 U.S. Stocks Every Canadian Should Own” – FREE!

Follow us on Twitter and Facebook for the latest in Foolish investing.

The Motley Fool has no positions in the stocks mentioned above.

A version of this article, authored by David Hanson, originally appeared on Fool.com

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing


3 Stocks to Buy and Hold for Total Returns

For investors seeking excellent total returns over the long haul, here are three Canadian stocks to buy before the market…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.

3 Defensive Stocks That Cautious Investors Can Feel Confident Buying

Consider buying Fortis (TSX:FTS) and other defensive dividend stocks in 2024.

Read more »

healthcare pharma
Stocks for Beginners

2 Healthcare Stocks You Can Buy and Hold for the Next Decade

These two healthcare stocks are showing strong signs of growth for the next decade and are already improving by leaps…

Read more »

analyze data
Tech Stocks

If You’d Invested $500 in Nuvei Stock in 2020, This Is How Much You Would Have Today

Nuvei (TSX:NVEI) stock has seen its shares climb to triple digits and fall below IPO prices. So, what now for…

Read more »

Is Nvidia stock a buy?
Tech Stocks

Is Nvidia Stock a Buy After Its Huge Post-Earnings Surge?

Nvidia (Nasdaq:NVDA) stock jumped after the company’s phenomenal fourth-quarter earnings report, and everyone’s talking about a booming future for AI.…

Read more »

Man data analyze
Dividend Stocks

1 Recession-Resistant Stock to Buy and Hold Forever

Brookfield Renewable is a recession-resistant high dividend stock trading at a cheap valuation in 2024.

Read more »

Bank Stocks

Is TD Bank Stock a Buy Now After Solid Earnings?

TD deserves to be on your radar today.

Read more »

potted green plant grows up in arrow shape
Dividend Stocks

3 Hypergrowth Stocks to Buy in 2024 and Beyond

There are stocks growing, and there are stocks hitting all-time highs. These are three that I would therefore consider on…

Read more »