My 401(k) has been invested in stocks of industrial companies. As of this morning it was up 4.4% for the year, in line with the performance of the Dow and above the NASDAQ. [Update: the indices were higher by another 0.6% to 1.1% today.] That may sound positive, but it's been a stressful ride.
Portfolios have swung +/- 10% in a few days. Individual stocks can be even more volatile, of course, but it's distracting when sharp ups and downs occur to diversified holdings consisting of more than a dozen stocks and mutual funds and when the daily market gain or loss is a multiple of one's paycheck.
Just yesterday the smart money was moving to euro investments because the Europeans supposedly had their act together much better than the Americans. That orthodoxy turned on a centime. The problems of the European currency now threaten to bring down the global financial system.
My advice for dealing with macro problems: play videogames, read escapist fiction, and watch football. It's better than worrying about problems one can't control.
[Update - 12/7: there's ego satisfaction, but not much else, when a major publication comes out with an article on this subject:
Picking winners during the past few months of uncertainty has proven difficult for most investors -- even the pros. While stocks are up 5% for the year, they've had an unsettling climb. Many investors have fled stocks for bonds, only to find that most bond yields are sinking and most bond fund managers are trailing their benchmarks thanks to bad bets on riskier issues. Even investments that are supposed to zig when the market zags, like oil and gold, have been moving much closer with stocks, making it difficult for investors to figure out the next step.]
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