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Don't let daily market shifts lead to hasty moves; Emotional swings can wreak havoc with your long-term investment plan

Most investors know to avoid making rash decisions during frenzied cable coverage of triple-digit drops for the Dow, a junky jobs report or bickering about the odds for the first-ever default on U.S. debt obligations.

But what about the instant Internet access to your very own personal net worth?

Should you be following the value of what you own like the weather? Or worse yet, just like someone who jumps on the scale each day to see their weight?

Do you really want to check out www.zillow.com daily to see how much your house is worth today?

Go to your online 401(k) account to see the latest balance? Watch the bottom line on your IRA every other day?

While some of us do the ostrich thing and do not open our 401(k) statements or bother to pay attention to how much we have in savings and checking, others overcompensate by adding up what they're worth down to the last nickel every minute.

If so, you could be effectively day-trading on your own financial health.

It used to be that people waited for the end of a quarter to study a financial statement or the end of the month. But now we've got constant access to our financial picture online. We can almost watch the storm clouds as they roll onto the scene, given the volatility of stock prices and home prices lately.

"People can look at their net worth on a daily basis," said Larry Moss, senior vice president for Raymond James in Birmingham, Mich.

And some can be tempted to make crazy moves if they're worth $500 or $1,000 less than they were "worth" a day before.

Emotional swings can interfere with long-term investment plan.

Every day, we're learning about yet another financial app or other way to manage our money on the go.

Most financial experts will tell you that it's a good idea to go online to view your bank account, see your credit report, or track credit card spending as a way to watch out for potential fraudsters.

"For the most part, technology has given a lot of clients a better reference point of where they're at," said Jason Fannon, financial consultant in the Charles Schwab office in Southfield, Mich.

Schwab, like others in the financial services industry, offers more tech conveniences to consumers, such as a way to deposit checks by taking a picture of the check with an iPhone.

OK, but is it possible that just like teens with a new video game we can play around with all these financial tech toys a bit too much?

Even financial professionals admit they check out the value of their homes more than they should.

"Unless you're going to buy and sell your house every day, it really doesn't matter," said Marisa Lenhard, senior portfolio manager for Sigma Investments in Southfield.

It's not just the house. Some consumers obsess on their credit scores, too.

"There are people who check it daily," said J.D. Roth, editor and founder of a blog at www.GetRichSlowly.org.

Roth has heard from some consumers who regularly track that credit score by paying for various monitoring services. These consumers do not make certain moves -- such as paying off their mortgage, credit cards or car loans -- because they worry about how it might hurt their credit score.

Sure, your credit score could drop slightly in some cases if you pay off a mortgage and it is your only installment debt. An installment loan, such as a mortgage or car loan, can bump up your credit score if you pay on time. It improves your mix of credit.

Even so, it's far more important to the health of one's score to pay bills on time, keep credit balances low and take on new credit only when it's really needed, said Craig Watts, public affairs director for FICO.

We're not talking about a possible huge hit to a score, if you pay off that mortgage or car loan.

"To me, the credit score is not the primary goal. The goal is to live a happy life with good financial stability," said Roth, who took more than three years to get out of debt.

Roth says you should pay more attention to how much you owe -- and check that score a few times a year if you want.

Even if you're not burdened by debt, should you be so focused on your net worth that you watch the changing balance each day?

William C. Roney III, senior vice president, division director for the Great Lakes for Raymond James, said people always had some idea about the overall picture of their finances.

Now, Roney said, online services allow people to be hyper-aware of what someone thinks their house is worth or what their portfolio is worth at a given time.

Many consumers go to spots like www.mint.com to manage their money, too.

But again, if you use a service like Mint.com or others, you can easily get regular updates on how much you are worth. If you're glued to the values you can find online, you just might panic and fear making any moves.

Or you might take bigger risks to catch up to what you think you should be worth. Or if you're looking at your investments daily, you might buy and sell stocks or mutual funds more often than you should -- pushing up trading costs.

"The daily emotional swings get in the way of a long-term investment plan," said Larry Moss, senior vice president for Raymond James in Birmingham.

Lenhard has noticed that some clients can have a "fixed number in their head" and their mood can change dramatically depending on whether their net worth is above or below that number. A few folks can even be upset if the change is as little as $10.

Too often, people remember the old benchmarks -- how much their net worth supposedly was back in 2006 or 2007 before the financial meltdown hit. But why should you waste all that energy trying to recapture that past high -- which frankly was nothing more than illusion given all the monkey business on Wall Street?

I'd argue that some baby boomers ended up in a financial mess because they stopped saving as they watched the rock 'n' roll values for stocks in the late 1990s and outrageous values for homes during much of the past decade.

It was far easier to convince yourself that you were rich -- and did not need to save much -- when you thought your home was worth $300,000.

Now, it could be too easy to convince yourself that you'll never be able to afford to retire -- or buy a new car or take a vacation -- when that same home could be valued at $150,000.

Wouldn't it be more productive to just keep plugging away -- no matter what your 401(k) or house are worth at 2 a.m. today?

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