Most Americans Check Their Investment Portfolio at Least Once a Week: Why That’s a Bad Idea
Written by
Gabrielle Olya
Edited by
Molly Sullivan
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Most American investors are investing for the long term. A new study by Finder and Tastytrade found that 48% are investing to build wealth for retirement and 42% are working toward financial independence.
Yet despite these long-term objectives, many investors are checking their portfolios quite frequently. According to the survey, 31% of investors check their portfolio weekly, 26% check it daily and 17% check it multiple times a day.
Here’s why checking your portfolio so often might actually backfire.
It Can Cause Unnecessary Stress
Many Americans stress about their finances — 75% of respondents feel stressed about their finances, according to a separate Finder study — and checking your investment portfolio so frequently can add to this stress.
“Average investors with long-term horizons generally don’t benefit from checking their portfolios more than daily,” said Laura Adams, money expert and MBA. “Short-term price changes aren’t as important as long-term trends. Therefore, watching investments too closely can cause unnecessary stress.”
It Can Cause You To Make Rash Investing Decisions
Not only can checking too frequently affect your mental state, but it can ultimately hurt you financially, too.
“You may panic if prices dip in the short term and get tempted to try and time the market, which is virtually impossible,” Adams said.
Most times, you’re better off riding out dips in the market.
How Often You Should Be Checking Your Portfolio
For most investors, checking your portfolio monthly is enough.
“When you’re a long-term investor, short-term changes in your portfolio, such as what happens from week to week, aren’t significant,” Adams said. “Reviewing monthly or quarterly statements gives you a bigger picture of trends so you can make any needed adjustments.
“For instance, if your investment returns aren’t high enough to achieve your goals, such as retiring by a specific date or age, you may need to reallocate your portfolio to a higher percentage of equities.”
However if you’re investing toward a shorter-term goal or if you’re nearing retirement, checking more frequently can be beneficial. Adams recommends that those who are nearing or in retirement may want to monitor their portfolios weekly or daily.
“If you’re nearing retirement and will soon require income exclusively from your investments, you must understand your portfolio’s risk level,” Adams said. “Consider shifting your allocation to preserve wealth by owning more guaranteed income investments, such as bonds. As you move from wealth accumulation to decumulation, you or a financial professional should review your portfolio more carefully and frequently.”
More From GOBankingRates
