How often should I look at my portfolio?

Category: Investment

Your portfolio represents your future. It is only natural to want to check how your investments are doing.

How often you need to do this depends on the type of investor you are. Speculators who constantly buy and sell individual stocks will monitor performance frequently, perhaps daily. Those investing for the long term with robust portfolios should have less need to check their portfolios constantly.

Some say you should look at your cash daily, your bonds every 2-3 years, and your equities every 10 years. It is very much an individual decision.

End unnecessary worry

There is one type of investor who should be careful. The long-term investor who checks performance weekly or more and is prone to worry. The equity markets regularly deliver negative returns over the short term. It is only over the longer term that we can be more certain of their ability to produce inflation-beating returns.

Over the long term, a portfolio may trend upwards. However, in the short term, its path may be marked by a series of ups and downs. The more frequently you check your portfolio, the more likely you are to see these swings in value.

The issue is that these dips can cause anxiety.

Beware of emotional investing

If you act on your anxiety, it can be harmful to your portfolio. Fear caused by a market fall could lead you to sell at a loss. Remember a fall in value is not a loss unless you sell out. In the short term most investors have absolutely no need to do this.

Alternatively, if you see values going up you might want to jump in and buy at a high.

These temptations are natural, but the important thing is not to give in to them. Trying to catch a quick short-term gain or avoid a short-term dip will most likely reduce long-term returns.

Self-discipline is key

When checking your portfolio, it is best to exercise self-discipline. Try not to look at it too often. This should help you view the performance of your portfolio more rationally and focus on reaching long-term goals.

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