How often should you check your investments?

In the ever-evolving world of investing, one question that often surfaces among both new and seasoned investors is “How often should I check my investments?” With the ease of online platforms and mobile apps, monitoring your investment portfolio has never been more accessible. However, the frequency of these check-ins can significantly impact your investment strategy and mental well-being. Let’s explore the ideal frequency for reviewing your investments and the factors that influence this decision.

Understanding the Balance: Regular Monitoring vs Obsessive Checking

1. The Importance of Regular Monitoring: Regularly checking your investments helps you stay informed about your portfolio’s performance and the broader market trends. It allows you to make educated decisions, ensuring your investment strategy aligns with your financial goals and risk tolerance.

2. The Risks of Over-Checking: Excessively monitoring your investments can lead to impulsive decisions, often driven by short-term market fluctuations. Market volatility is a normal part of investing. This behavior can derail your long-term investment strategy and may increase stress levels. It is best to check your investments less frequently, so that you can focus on the future.

How Often Should You Check Your Investments?

If you are a long-term investor with a horizon of more than five years, checking your portfolio quarterly or bi-annually is generally sufficient. This frequency allows you to stay updated on your accounts without getting caught up in the daily market noise. During periods of high market volatility, it’s tempting to monitor your investments closely. However, it’s important to resist the urge to make hasty decisions. Stick to your investment plan and review your portfolio at your regular intervals.

Factors Influencing Check-In Frequency

1. Investment Goals: Your check-in frequency should align with your investment goals. Short-term goals may require more frequent monitoring compared to long-term objectives, where less monitoring is best to stay focused on the future.
2. Risk Tolerance: Investors with a lower risk tolerance might feel more comfortable checking their investments more frequently. And that is ok, as long as it doesn’t become a daily event. If you are investing more aggressively and have a riskier portfolio, you may also feel more inclined to check your investments more often. Just understand that investing requires a healthy balance of patience and making informed decisions.
3. Market Conditions: Be aware of current market conditions, but don’t let short-term fluctuations drive your investment decisions. It is ok to be concerned with the market, but keep your emotions out of investing. If you have concerns, it is best to address them with your financial advisor.
4. Life Changes: Major life events like marriage, having a child, or retirement can necessitate a portfolio review. This is normal and common reason for a portfolio review and financial plan update.

It’s a Personal Decision

Determining how often to check your investments is a personal decision that depends on various factors including your investment strategy, goals, and risk tolerance. While staying informed is important, it’s crucial to find a balance that aligns with your investment approach and also your personal well-being. Remember that successful investing is often a marathon, not a sprint.

FAQs

1. Is it bad to check my investments every day? For long-term investors, daily checks might lead to unnecessary stress and impulsive decisions. It’s more beneficial to keep your focus on the long-term.
2. Can checking my investments less frequently actually benefit my portfolio? Yes, less frequent checks can help you maintain a long-term perspective and avoid knee-jerk reactions to market fluctuations.
3. Should I change how often I check my investments during a market downturn? While it’s natural to be concerned during market downturns, sticking to a regular check-in schedule is recommended to maintain a long-term perspective.

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