Don't Let the Day's News Drive Your Investing

If you’re looking for a completely delightful experience, disconnect yourself from the markets for a few weeks—maybe longer. Don’t read the news. Don’t watch the indexes. Don’t check your portfolio. Just go away and live a normal life. See things. Touch nature. Sing. Hike. Dance. Meet people. Talk with your family. Once you return to reality and review the investment news you missed, you may well conclude that ignorance really is bliss.

That is how things used to be, when my kids were small and I didn’t have the time to constantly check my portfolio. But now that they’re grown and it has become so easy to obtain information, I find myself checking news and market results multiple times daily. And all that checking practically begs you to do something, even if doing nothing is the best course. It took a two-week vacation to Panama and Ecuador, primarily to visit the Galapagos Islands, for me to relearn the lesson that less can be better than more.

I admit that it was hard to withdraw from my investment-centric world. In fact, we booked our flights on Copa Airlines just so I could get a firsthand view of one of my Practical Investing portfolio’s worst performers, Copa Holdings (symbol CPA, $62). The stock has been a nightmare, but our flights were dreamy, taking us back to an era when planes served full meals and booze free, and departed and arrived on time. (Share prices are as of March 1.)

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Copa dominates Tocumen International Airport, which lets you avoid a slog through Panamanian customs when you’re passing through to other parts of Latin America. But I suspect that few Americans are familiar with Copa, which serves just 12 U.S.

airports. Most of our shipmates in the Galapagos had been steered to U.S. carriers, even though it meant that many traveled hours out of their way. I think Copa has the potential to attract many more U.S. travelers, so I am keeping the shares for now.

I actually thought I might stay connected during the trip because the sales literature promised Wi-Fi on the ship. The promise proved to be mostly a tease, as service was spotty. But the electronic deprivation turned out to be a blessing in disguise. I had a wonderful time living in the moment and, to quote Shakespeare, we missed a lot of “sound and fury, signifying nothing.”

In the meantime, the markets fluctuated without me. When we arrived home, my portfolio was worth a bit more than it was when I left, despite a sharp drop in early February that would surely have unsettled me had I known about it in real time.

Portfolio moves. That said, I made a few moves in the portfolio both before and after my vacation. As I mentioned last month, I bolstered my position in Apple (AAPL, $101). I also bought 150 shares of biotechnology giant Gilead Sciences (GILD, $90) for $90.81 apiece in late January. And I bought 550 shares of General Motors (GM, $30) for $28.58 in late February. GM sells for just 5.5 times estimated 2016 earnings, about two-thirds less than the overall market’s price-earnings ratio. That seems ridiculously cheap, though I’m aware that many experts suggest selling shares of a cyclical company, such as an automaker, when its P/E is in the gutter, on the theory that earnings are at or near a peak and have nowhere to go but down. But I don’t think GM’s profits have peaked yet for this cycle. Plus, the stock boasts a healthy 5.1% dividend yield.

Finally, I unloaded my stake in Microsoft (MSFT, $53), even though I’d previously called it a core holding. The stock has been on a roll since I bought it four years ago. With the P/E now more than twice the firm’s estimated earnings-growth rate, the shares have gotten too pricey for my taste. But this is one sell decision I’m not anguishing over. I walk away from Microsoft with a gain of 123%, including dividends.