Q: I'm pretty new to investing and have built a portfolio of a dozen stocks. How often should I check my stock prices?
Unfortunately, there's no perfect answer to this question. Many people love watching the day-to-day movements of their stocks, while others find checking stock prices stressful (or even boring).
Having said that, here's my advice on the matter: Assuming that you're investing for the long term, there's no need to check your stocks more than once a month or so unless you enjoy doing so.
The most important thing is not how often you check your stocks. Instead, the important thing is how you react to the moves you're seeing. And checking stocks too often can lead to knee-jerk reactions.
Specifically, checking their portfolios too frequently tends to make new investors sell stocks for the wrong reasons. For example, if a certain stock jumps by 20%, it can seem like a good idea to sell and lock in the gains. Or, if a stock plunges by the same amount, it could seem smart to sell before things get any worse. As long as you believe in the companies you invest in for the long term, both of these are bad reasons to sell.
The bottom line is that if you aren't prone to making knee-jerk reactions when your stocks move, you can check them as often as you'd like.
I've spent years delving into the intricate world of investing, with a particular focus on stock market dynamics and portfolio management. My expertise stems from not just theoretical knowledge but also hands-on experience navigating various market conditions and witnessing firsthand the impact of different investment strategies.
Regarding your query, the frequency of checking stock prices is a pertinent concern for investors. The advice offered in the article resonates well with established investment principles. Long-term investors, especially those with a diverse portfolio of stocks, typically benefit from a less frequent approach to monitoring stock prices.
Let's break down the concepts mentioned:
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Portfolio Diversification: This refers to spreading your investments across different assets to mitigate risk. Diversifying across various stocks minimizes the impact of individual stock price fluctuations on your overall portfolio.
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Investing for the Long Term: The strategy emphasizes holding onto investments for extended periods, aiming to benefit from the overall growth potential of the market rather than short-term fluctuations.
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Emotional Discipline in Investing: Reacting impulsively to short-term market movements often leads to poor decisions. Emotional discipline involves staying rational and not letting short-term fluctuations dictate investment decisions.
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Knee-Jerk Reactions: Acting hastily based on immediate stock movements without considering the long-term prospects or fundamental changes in the company's outlook. This can often lead to selling for the wrong reasons.
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Checking Frequency: The article suggests that checking stock prices too often can lead to knee-jerk reactions, particularly for new investors. It's recommended to limit frequent monitoring, advising a monthly check-in unless it aligns with an investor's enjoyment or emotional discipline.
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Belief in Long-Term Investments: The importance of believing in the companies in which you've invested for the long term is emphasized. Selling due to short-term price swings can be detrimental if the fundamental reasons for investing remain strong.
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Disclosure Policy: The Motley Fool, like many financial entities, maintains a disclosure policy outlining its commitment to transparency and ethical reporting practices.
Investing isn't just about numbers; it's about understanding the psychology behind market movements and your own reactions to them. By adopting a prudent approach, investors can better navigate the volatile nature of the stock market and align their strategies with their long-term goals.
FAQs
If you're a long-term investor (and you should be) you don't need to check your stocks every day. You don't even need to check your stocks every WEEK. I only check my stocks once or twice a month to make sure the automation is working. The daily changes in stocks are almost always noise — plain and simple.
What are the 10 stocks The Motley Fool recommends? ›
The Motley Fool has positions in and recommends Alphabet, Amazon, Chewy, Fiverr International, Fortinet, Nvidia, PayPal, Salesforce, Uber Technologies, and Zoom Video Communications.
Is Motley Fool stock advice worth it? ›
Motley Fool Stock Advisor can be a good service for investors wanting stock recommendations, reports, and educational resources. The advisor service has an average stock pick return of 628% and has quadrupled the S&P 500 over the last 21 years, according to Motley Fool's website.
How often should I evaluate my stock portfolio? ›
To summarize, Quevedo said, “I'm a fan of checking it at least once a month and then every quarter, dive into it. You don't want to panic if you have a bad quarter. You'll see the trends and you can move money around if you need to.”
What is the 3 month rule for stocks? ›
If a selling party is an affiliate of a company, he cannot resell more than 1% of the total outstanding shares during any three-month period. If a company's stock is listed on a stock exchange, only the greater of 1% of total outstanding shares, or the average of the previous four-week trading volume can be sold.
What is the 30 day rule in stock trading? ›
Q: How does the wash sale rule work? If you sell a security at a loss and buy the same or a substantially identical security within 30 calendar days before or after the sale, you won't be able to take a loss for that security on your current-year tax return.
What are Motley Fools rule breaker stocks? ›
However, each newsletter focuses on a different type of stock investment. The Motley Fool Rule Breakers newsletter focuses more on high-growth stocks in emerging or relatively new markets. The Motley Fool Stock Advisor service focuses more on stocks with lower volatility.
What is Motley Fool's all in buy? ›
Sometimes they toss in a different company as the focus of this pitch, too, with similar language, so perhaps we'll find a surprise this time. So what do they mean by this “All In” buy signal? Basically, it just means a stock that they like so much, they've recommended it more than once.
What stock will boom in 2024? ›
2024's 10 Best-Performing Stocks
| Stock | 2024 return through March 31 |
|---|
| Arcutis Biotherapeutics Inc. (ARQT) | 206.8% |
| Janux Therapeutics Inc. (JANX) | 250.9% |
| Trump Media & Technology Group Corp. (DJT) | 254.1% |
| Super Micro Computer Inc. (SMCI) | 255.3% |
6 more rowsApr 1, 2024
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A yearly evaluation of your investments, at roughly the same time each year, is often enough. An annual review can keep you engaged in your holdings while tracking the progress of your investment goals. It can also help you know when your asset allocation has shifted and it's time to rebalance your holdings.
How often should an investor review their portfolio? ›
A portfolio is rebalanced at regular intervals, such as annually or quarterly, irrespective of asset price movements. Threshold or price-based rebalancing. A limit is set on how far the portfolio can deviate from your desired target mix, such as a 60/40 stocks-to-bonds mix.
How do I know if my portfolio is doing well? ›
Relative performance — Comparing your return to the overall market is a better measure. If your total portfolio is up 20% for the year and the overall market is only up 15%, you have done very well. Or if your portfolio is down 10% and the overall market is down 15%, you have done well.
What is the 3 day rule in stocks? ›
In short, the 3-day rule dictates that following a substantial drop in a stock's share price — typically high single digits or more in terms of percent change — investors should wait 3 days to buy.
How long should you realistically hold stocks? ›
They consider anything less than five years a short-term hold and want to hold forever if possible. The ideal holding period depends on the investor's circ*mstances, goals, risk tolerance, market conditions, and each specific stock held. Thirty years is an excellent long-term wealth-building cycle.
How often do you check your investment accounts? ›
Generally, it's a good idea to check your investment account around every six months to a year. This may seem like a long time, but there are good reasons for it. The biggest reason not to follow the performance of your account too closely is that doing so can lead you to make decisions that cost you.
How long should I hold my stocks for? ›
If your stock gains more than 20% from the ideal buy point within three weeks of a proper breakout, hold it for at least eight weeks. (The week of the breakout counts as week 1.) If a stock has the power to jump more than 20% so quickly out of a proper chart pattern, it could have what it takes to become a huge winner.
