When it comes to investing, it’s important to keep an eye on your investments – after all, it’s always a good idea to know how your portfolio is performing, so you can adjust your strategy to try and maximise your profits.
But how often should you sign-in to your dashboard and check your investments?
Why it’s important to check your investments?
First things first, as an investor, it’s only natural to want to monitor how your investments are doing and there’s nothing wrong with that. In fact, having a look at your dashboard can be useful.
Say, you’re investing on your own and decide to check your investment plan. You’re a confident investor with a medium risk appetite, and you want to maintain a 50/50 split of shares and bonds.
You may notice some changes in your portfolio – for example, the split has moved to 80/20 in favour of shares due to market movements and a rather good performance from shares.
Well, this means that your risk level has increased and you may want to make adjustments to your portfolio to get back to your initial split – this process is commonly known as ‘rebalancing’ and requires some monitoring.
Another reason to check your investments is to simply ensure you’re on track with your goals. If your aim is to get a decent pension to retire comfortably, you may want to check whether you’re going in the right direction.
But the question here isn’t much about whether you should check your plan – at the end of the day, it’s useful to know where you stand.
The real question is rather about how often you should monitor your investments.
How often should you check your investments?
Well, the answer mainly depends on what kind of investor you are. If you trade investments frequently or even daily, then you may as well check your investments as often as you can.
One thing to note though is that day trading, which relies on quick decisions and short-term fluctuations, can be very risky.
With less time to think, and constant price monitoring, the odds of losing money are high and evidence shows very little success in terms of making a gain – we’ve got a blog about day trading that explains it all: https://www.wealthify.com/blog/day-trading-vs-investing.
If you’re a long-term investor, then checking your portfolio daily may not be helpful. In fact, opening your dashboard too frequently could potentially harm your investment journey.
Think about it, by constantly checking your plan, you’ll only worry yourself as you’ll probably witness fluctuations in value one day to the next. And instead of rationalising and getting some perspective, you may become a bit anxious and make rash decisions that could hurt your investment future.
Markets are like roller coasters – they go up and down over the short-term and if you’re investing for the long-term, you need to learn to live with the bumps.
And a great way to stop bothering too much about the swings is to try and ignore the noise, remember your goals, and limit how often you check your portfolio.
We’re not saying not to check your portfolio at all – remember, it’s always useful to know how your investments are doing. But instead of doing it weekly, or even daily, why not give your plan the space it deserves to potentially flourish.
Investing won’t make you rich overnight, it will however give your money a chance to grow over time – but it can take years, so really, there’s no need to go on your dashboard every five minutes, like it’s a Twitter feed. Once every month, once every three months, once every six months, or even just once a year, could suffice.
How to avoid checking your portfolio too frequently
If you want to improve your habits as an investor, you may need to do some of the following things.
Come up with a plan
To avoid any temptation, choose when to check your investments and stick to this frequency. If you have FOMO (fear of missing out), then baby steps will do – you could start with limiting your monitoring to once a day, then once a week, once a month, etc.
Think long-term
Investing is for the long-term and it’s important to keep this in mind. Remember why you entered the investment world in the first place. Focusing on your financial goals could help you remain calm when markets are swinging, and it will force you to look at the bigger picture.
If you’re not planning on using your money in the next 20 years, then you could try and ignore the noise and avoid your dashboard alone for a bit.
Get help
If you really can’t resist the temptation to check your investments, then it could be a good idea to ask for help. You could for example consult a financial advisor and ask them for some useful tips. Having someone to help you control your urges will also make you accountable.
You could also leave the investing to experts. Instead of doing the monitoring, trading, and rebalancing yourself, you could use online services, like Wealthify.
Designed to do the hard work for you, these digital investment platforms will build you a plan depending on your risk appetite, and they’ll manage it on an ongoing basis.
And you’ll have access to a dashboard where you can check how your investments are doing – but since the calls are made by experts, chances are you won’t see the need to check your portfolio every five minutes.
Past performance is not a reliable indicator of future results.
The tax treatment depends on your individual circ*mstances and may be subject to change in the future.
Please remember the value of your investments can go down as well as up, and you could get back less than invested.
As a seasoned financial expert and investment enthusiast with a comprehensive understanding of the dynamics within the investment landscape, it's evident that the article underscores the critical importance of regularly monitoring one's investment portfolio. The insights provided align closely with established principles and practices in the field of investment management.
The article initiates by emphasizing the natural inclination of investors to monitor their portfolios, citing the need to be aware of the performance for strategic adjustments. This is a fundamental concept in investment management, rooted in the principle of active portfolio supervision to align with financial goals.
The notion of 'rebalancing' is introduced as a proactive strategy to maintain the desired asset allocation. This concept is a well-established practice, especially for investors adhering to specific risk appetites and allocation preferences.
Furthermore, the article astutely addresses the frequency of portfolio checks, acknowledging that the appropriate frequency depends on the investor's style. The distinction between day trading and long-term investing is highlighted, emphasizing the potential risks associated with excessive monitoring in the former. This aligns with empirical evidence that day trading is a high-risk activity with limited success rates.
The analogy of markets being akin to roller coasters underscores the article's commitment to educating investors about the inherent volatility in short-term market movements. This aligns with the conventional wisdom of adopting a long-term perspective to navigate market fluctuations successfully.
The article provides practical advice on how to avoid checking portfolios too frequently. The emphasis on developing a monitoring plan, thinking long-term, and seeking professional advice is consistent with established best practices in investor behavior and psychology. The suggestion to leverage digital investment platforms like Wealthify aligns with the contemporary trend of robo-advisors and automated investment services.
In conclusion, the article not only exhibits a deep understanding of investment principles but also offers practical guidance to investors, emphasizing the importance of discipline, long-term thinking, and seeking professional assistance in navigating the complexities of the financial markets.
