We’ve had a handful of new clients recently that brought money to Steadyhand as a result of a real estate sale. The conversations have been interesting and got me thinking.

A majority of the talk has been around asset mix. What makes sense for the client at their stage of life? Do they want their newly acquired financial assets to replace the capital growth potential, inflation protection and/or income flow of their property?

Execution issues are also of prime concern. Do they put all the money to work immediately, or move towards their target asset mix through a series of steps?

In hindsight, I realized what we didn’t talk enough about is one of the major differences between owning real estate and a portfolio of stocks and bonds. A portfolio is priced every day. All the squiggles along the way are in plain view.

With a home or rental property, the owner has a good sense of what the market is doing, but the information isn’t regular or specific enough to make them think about their net worth on a daily basis.

This may not seem like a big deal for most readers, but for an inexperienced investor who has the majority of his/her net worth invested, it could be.

Consider a couple of facts. Behavioral economists have determined that the negative impact of bad news carries more weight than the positive effect of good news. Some studies show that it is 2.5 times worse. In other words, we beat ourselves up more than we celebrate (I thought only money managers did that). When you put that together with the fact that on a daily basis the market is up just slightly more than 50% of the time (54% in one set of numbers I saw), the result is that an investor that looks at their account every day is likely to be chronically depressed, even if their portfolio is doing well.

At this stage, I don’t have any brilliant solutions for investors who are making the ‘real estate to stocks’ transition. But I would make sure your asset mix isn’t too growth oriented in the early stages, even if the ultimate goal is to have a significant weighting in equities. There’s nothing wrong with getting used to short-term volatility by starting slowly.

And I would try to avoid looking at your account too often. Monthly or quarterly is more than adequate. Getting too caught up in the up and down drafts of the capital markets is not good for your mental health.