I’m filling in for Emma Rapaport this week as she takes a well-earned break.

It’s Friday night and I’m sitting in an Uber. My driver is giving me a crash course in crypto trading as we crawl towards Newtown. He first invested in May after seeing a friend’s trading account. Six figures he tells me. What’s it been like since then? Well, yes, he did lose 40% of his portfolio when the market crashed in June. But, no, he’s not concerned. Why would he be? Bitcoin is going to $1 million in 5 years. There’s a brief interlude where we cover the finer points of the crypto derivatives market before I get a list of YouTube channels and Reddit forums to check later. Time spent there led him to a new strategy: buy a bunch of Bitcoin, put the rest into worthless coins—the cheaper the better—and wait for them to go 40x. I asked him if he owned any shares. Not anymore. He sold them all (at a loss) after getting into crypto.

“Once you go crypto you can’t go back,” he told me as I got out of the car. “It’s like going from a car to a tuk tuk.”

My Uber driver isn’t unique. He’s one of the millions of retail investors who’ve flooded into equity and crypto markets in the last 18 months. He’s not even particularly new. Speculators, day traders and stock tip enthusiasts have been part of markets for centuries.

Then and now, they're mostly wasting money and time.

There's many reasons why micromanaging and/or trading your portfolio are clever ways to lose money and they’re all variations on a theme: we’re stupider than we think. We buy things because others do. We buy those things high and sell them low. We invent reasons for our lucky breaks and excuses for our mistakes.

Those mistakes are expensive. An investor who bought Dogecoin in March is up 457% today. Meanwhile, someone who bought at the peak in May is down 62%. Bought Oracle at the peak of the dot-com bubble and you were still down 17 years later.

But just as important as the financial cost is the loss of time. Micromanaging your investments costs precious time you can’t get back.

For most of us, investing is a means to an end: a holiday, a house or retiring comfortably enough to ignore how much the appetiser costs (my own measure of affluence). Achieving that end takes time and effort. Time setting goals, learning about investing and picking the right fund. Time spent rebalancing your portfolio, ditching bad investments and paying taxes. All time well spent.

Can the same be said for constantly checking your portfolio, debating stock tips on Reddit, building spreadsheets and trading systems or telling everyone at the barbeque about your latest idea? The average person lives about four thousand weeks, is this the best way to use them?

People seem to think so. In 2020, time spent on finance apps leapt 55% worldwide, according to App Annie, a mobile analytics firm. In the US it was up 135%. The ASX reported a big jump in trading activity at the start of the pandemic.

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It would be easier to justify the time if it delivered results. But it often doesn’t. It’s not to say that amateur balance sheet analysis or crypto day trading is a waste of time and money. It’s just a waste of time and money for most of us. Some people make money playing professional poker, the rest of us are paying their bills.

So, are all those hours adding value? One way to check is to ask whether you’re building one of the four sources of “edge” or outperformance: informational (you know something I don’t), analytic, (you understand something I don’t), behavioural (you do something I don’t) or structural (you’ve got incentives I don’t).

Because if they’re not adding value, you’re wasting time. Two thousand years Seneca wrote: “People are frugal in guarding their personal property; but as soon as it comes to squandering time they are most wasteful of the one thing in which it is right to be stingy.” Every minute spent watching YouTube clips on cryptocurrency derivatives is a minute that could be spent with a loved one, reading a book, watching TV, looking at a sunset, whatever. Economists call it “opportunity cost”—the next best thing you could be doing. And if you’re not weighing that up, Seneca wants to have a word with you.

I speak from personal experience. When I started investing I spent hours building elaborate spreadsheets to track my assets. I waded through prospectuses, manually calculating how much of my portfolio was in China and the US. It took multiple Saturdays and nights after work to finish. The only problem? It was too complicated to use. It broke down anytime I added new investments and I’ve only opened it once since. I’d have been better off saving the Saturdays and outsourcing it to an online tool.

Time is valuable, don’t waste it. There are thousands of things you could be doing, so why spend time on activities that add little to no value. We assess our investing decisions based on whether they’re profitable. But add time to that equation and treat it as you would returns, prudently. There are better things to do.

The week according to Morningstar

Normally docile bond markets were rocked this week as traders and central banks duelled over the path of inflation and interest rates. For Firstlinks, Harry Chemay catalogued the Reserve Bank’s running battle with bond vigilantes. Meanwhile, Morningstar head of equity research Peter Warnes discussed the US Federal Reserve’s long-awaited announcement that it would begin tapering bond purchases.

The tumult extended to Glasgow, where world leaders met for the COP26 climate summit. There was a promise to end deforestation by 2030 but an agreement to end coal use floundered. Morningstar’s Leslie Norton surveyed the risks and opportunities for investors ahead of COP. For those investors looking to take more action despite the impasse, Morningstar has put together a guide for picking the right climate fund. I spoke with gold-rated Stewart Investors about 3 sustainable investment ideas outside clean energy.

Meanwhile at home, Westpac’ disappointed investors on Wednesday when it announced full-year results. Shares are down 7.4% this week and I spoke with banking analyst Nathan Zaia about what went wrong.

On Thursday, the hotly anticipated BetaShares Crypto Innovators ETF (ASX: CRYP) launched and promptly broke trading records. Morningstar’s John Rekenthaler put forward the bull case for Bitcoin last week.

Square shareholders approved the acquisition of Afterpay earlier the same day, all but sealing Australia’s largest ever takeover. With Afterpay leaving the ASX, I spoke with our analyst Shaun Ler about two local fintechs for those still interested in a disruptive play.

On Friday, trading was suspended for another Chinese developer after news broke it had missed payments on a wealth management product. With investors leery of China, I looked at Morningstar revenue data and found many Australian ETFs holders are more exposed to the Chinese economy than they think.

Finally, Firstlinks managing editor Graham Hand will speak about how you can grow your portfolio using ETFs at the Australian Shareholders’ Association Virtual Investment Forum on 23 November. He’ll be joined by speakers from Platinum, Perpetual, VanEck and Magellan. You can register here.

Enjoy the weekend.

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