The Best Investors Avoid the Temptation to Tinker
The capital markets have a way of making us feel like we should always be “doing something.” When stocks are plunging, doing nothing feels irresponsible. And when they rip higher, doing nothing conjures up a feeling that you’ll miss out on the next opportunity.
That itch to act is human, and it’s gotten stronger in the age of push alerts, app badges, and celebratory screen flourishes after each trade. Regulators have warned that these “digital engagement” tricks can prompt people to trade more than they otherwise would, and research has tied push notifications to a measurable spike in trading within minutes. But all this constant activity amounts to nothing more than “tinkering.”
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One widely-cited study of Robinhood users found they trade more in the stocks the app draws attention to, a pattern the authors call “attention-induced trading.” Features of the app help channel attention—and, in turn, activity—toward what’s buzzing right now. However, the best investors resist that impulse. They understand that most investment themes need years, not weeks, to evolve.
Consider when Berkshire Hathaway began buying Apple in 2016; it was long after the iPhone was already a staple across the globe. Yet at that time, based on his own analysis, Warren Buffett saw fit to make it the firm’s largest holding. And it was only in 2024—after years of compounding—that Berkshire began trimming the position meaningfully.
Similarly, Berkshire’s core Bank of America stake traces back to a Great Financial Crisis-era 2011 preferred stock deal that turned Berkshire into one of the bank’s top shareholders. And after holding the stock through multiple market cycles, Berkshire started trimming the position mid-2024 and has kept selling into 2025 as it takes gains and repositions the portfolio.
The fact is that tinkering—especially during periods of extreme volatility when emotions run hot—causes investors to make predictable, yet avoidable, mistakes. For instance, we are prone to sell what’s been working and hang on to what’s not. Behavioral finance experts refer to this phenomenon as the “disposition effect.”
The solution is to develop your own personal investment policy statement (IPS), which requires you to decide in advance how you will behave when markets move meaningfully in either direction. Including a simple rebalancing policy into that IPS that includes pre-planned trading periods and allocation thresholds is a great way to systematically sell a little of whatever is running hot and add to whatever has gotten cheaper—eliminating the urge to take action whenever the markets become volatile and others around you are panicking.
Warren Buffett’s timeline underscores the larger point. Berkshire’s positions in both Apple and Bank of America were multi-year commitments built around an investment thesis that could withstand daily headlines, presidential elections, interest rate cycles, product launches, and regulatory scrutiny. In fact, the most enduring investment strategies look boring in the middle years and only become obvious at the end.
That said, there is nothing inherently wrong with trading or speculating for entertainment purposes. But if that is what you are doing, call it what it is, and put boundaries around it. Decide upfront how much you are willing to set aside for that purpose, move those dollars into their own separate account, and think of it the way you would about spending money on a great weekend in Las Vegas—fun if you can afford it, and no harm done if the dice don’t roll your way.
The key is to avoid allowing that same impulse to bet it all from creeping into your accounts that are earmarked for significant situations like retirement, college tuition, or any other bigger financial goals that you can’t afford to gamble with. After all, having patience and staying disciplined isn’t passive. It’s an active decision to let time—not dopamine—do the compounding.