With investing apps and endless online communities, from Discord servers to Twitter feeds to YouTubers, it is easier than ever to gather information on the stock market instantaneously. In fact, a recent 2021 SurveyMonkey poll revealed that about 40% of Gen Zers and Millennials check their investments every day.
The constant bombardment of news predicting a stock market crash can create a sense of urgency and lead to impulsive decision-making. With news articles like this making headlines every day, you may feel the urge to log into your investment accounts multiple times a day to see the damage done to your investment portfolio and get pressured to sell, which is frankly not helpful at all.
Instead, go easy on yourself and avoid constantly comparing your portfolio to its previous highs or expected performance. If you feel anxious about your investments, chances are you are checking them way too often for your own good. One of the worst things you can do as a new investor is to check your stocks like it’s your Tik Tok feed and then freak out at the slightest dip in your portfolio and start selling all your positions.
If you are one of those people, we recommend taking a breather and stepping away from your investments. Panicking and sweating at the slightest price fluctuations is the perfect way to make terrible financial decisions. But of course, this is easier said than done, especially with self-proclaimed investment experts talking as if every day is the end of the world.
On the other hand, if you enjoy learning about investing and scour through financial news for entertainment purposes, then you do you. There is nothing wrong with spending your time on Reddit’s Wall Street Bets or listening to people spill the deets about their terrible financial decisions on The Ramsey Show.
However, keep in mind that most news you see these days are meant to incite pure fearmongering or for entertainment purposes. More often than not, sensational headlines are how the big moneys get made. Nobody knows where the market is heading, and those that do are probably just kidding themselves or creating noise.
Now on to the main reason you are here: how often should you check your stocks, and what should you keep in mind as an investor?
- A significant number of investors check their stocks every day. While there is no consensus on how often investors should check their stocks, monitoring your stocks daily can lead to irrational decision-making and short-term thinking.
- We recommend checking your stocks once a month or quarter to let your portfolio grow over time and prevent your emotions from taking control.
- We will go over a few healthy financial habits you can develop to build wealth and achieve your investment goals.
How Often Should Investors Check Their Portfolio?
If you are asking yourself, “How often should I check my stocks?” the truth is, it depends. Many people, myself included, love watching price movements on a day-to-day basis, while others find this process highly stressful or boring.
If you are a long-term investor, there is no need to check your stocks every day, as doing so will not make much of a difference in your profits a few years or a decade from now. But, if you are a daytrader, you should be checking your stocks quite often.
If you are a buy and hold investor, your best bet is to check your stocks as little as possible (unless this is something you enjoy doing). While it is difficult to avoid looking at your investments all the time, doing so will help your investments perform better in the long run.
But, if this is unavoidable, consider checking your stocks once a month or quarter instead. You should check your assets periodically to rebalance your portfolio. But, if you are investing for the long haul, do not let short-term price fluctuations impair your decision-making. Giving yourself some time off allows you to regularly check on your investments while maintaining a healthy relationship with your money.
Too much checking can lead to over-trading, which leads to over-selling and lower returns over time. If stepping away from your investments seems unthinkable or nerve-racking, start by checking your stocks once a day or week and then take it from there.
Remember, the stock market will go up and down regardless of whether you are aware or not. If you are investing solely in broad market index funds like VOO or SPY, then that is more of a reason to rebalance your asset allocation infrequently, as these funds are meant to be low-maintenance and hassle-free.
Note that there are some cases where it is helpful to look at price movements more regularly. If you are buying and selling individual stocks, keeping an eye on the prices every day will help you find good opportunities to buy the dips or sell when the prices are too high. But, this is not a green light to go crazy with trading. If you have done your due diligence using fundamental or technical analysis, you need to give your companies time to grow in value.
Based on historical returns, your stocks should grow in value by an average of 7% each year. If you still fear that your investments may go to zero, consider using a robo-advisor or financial advisor to invest on your behalf and help you maximize your returns based on your risk profile and investment goals.
The main point we want to focus on is how you react to price action. Most investors react poorly when they see paper losses or gains and end up selling for the wrong reasons.
For example, if one of your positions jumps up 30%, it may seem like a good idea to sell at the time. But, you may be locking in profits at the expense of future gains. Or, even worse, you see a temporary drop and end up selling at a loss only to see the price recover shortly after.
The bottom line is that if you are not the type of person to overreact, then check your stocks as often as you would like. But, when you are checking your stocks, your default approach should be to evaluate your portfolio carefully and avoid making unnecessary changes. If you are not retiring anytime soon, you should focus on building wealth and handling the inevitable ups and downs of the markets.
Volatility in the markets is completely normal and expected. It is an unavoidable part of the stock market. If anyone could predict what happens in the future, then we would all be rich and buying Lambos left and right. But, unfortunately, we have to deal with both bull markets and bear markets.
If you are a day trader or want to be a day trader, ignore everything we mentioned earlier about long-term investing. As a day trader, you make money by taking advantage of intraday price action. Day traders use various methods to make trading decisions and leverage short-term price movements. That requires making many trades in a single trading session and opening and closing positions within the same day.
Most active traders focus on short timeframes (think seconds or minutes) and will close all their positions at the end of the day. They commonly use technical analysis, such as support and resistance, VWAP, or MACD, to identity price trends and patterns and determine when to enter and exit positions.
With day trading, there is less emphasis on finding high-quality companies or funds and understanding what you are investing in. Instead, the focus is on using volatility to find profitable entry and exit points. Note that most profitable day traders treat day trading as a full-time job rather than as a hobby. That is because only ~1% of traders consistently make money, according to Tradeciety, so keep this in mind before you dive into daytrading.
Time Horizon and Financial Goals
Your time horizon and financial goals also play a huge factor in how often you should check your stocks. If you have a relatively short time horizon, it makes sense for you to check your investments frequently. For example, if you are saving for a vacation that is coming up in a few weeks or months, you should probably check your portfolio every week or every other week to make sure nothing goes wrong. On the other hand, if you are saving for retirement 20 years from now, then you have the benefit of time to buffer any losses or investment mistakes you may make along the way.
5 Healthy Habits to Keep Yourself From Going Crazy
Asking yourself, “How often should I check my stocks?” is a valid question. But, what is not reasonable is letting emotions control your decisions, stressing over things that are out of your control, or trying to time the markets.
I have had friends and family who used to check on their investments nonstop and stress over slight dips in the markets. Particularly for volatile investments, like growth stocks and crypto, there is no need to torture yourself when the markets fall.
While they probably knew this already, that did not stop them from refreshing their accounts every minute and then proceeding to panic. No matter how many times you look at your investments, that will not change what happens in the markets.
So, let’s go over some healthy habits to develop to keep yourself sane.
1. Take the Emotions Out of Investing
According to myopic loss aversion research, the more you check your portfolio, the riskier you will perceive investing to be. In short, the more investors monitor their stocks, the more likely they are to see losses and thus get upset by the prospect of losing money. On a related note, a psychology study showed that we feel the pain of a loss ~2x more intensely than the joys of a gain.
If you check your portfolio daily when the stock market is not doing well, you may end up making financial decisions that hurt your returns in the long run. If you are investing for the long haul and have a strong portfolio mix in place, you do not want to get caught up in short-term volatility and make impulsive decisions.
The worst investing mistake you can make during periods of market volatility is to buy high and sell low because you let your emotions get the best of you. For example, let’s say you bought shares of Nvidia stock in early July 2021 at ~$205 per share. In mid-July, the share price fell to ~$179, or ~13% lower than your initial purchase price. If you panicked and sold at this point, your fear of more losing money would have cost you a ~50% gain as of December 27, 2021.
Because you sold too early, now you are probably upset about the gains you missed out on and may feel FOMO, so you might end up buying at a higher price. And do not forget the money you lost because you sold your position at a 13% loss.
Remember, making money takes time and perspective. The surest way to make money in the stock market is to buy and hold for the long run. If you cannot get a grip on your emotions, checking your stocks daily will only set you up for emotional pain and expose you to costly short-term decisions.
2. Do Not Stress When You Do Not Have To
Although the stock market can be an exciting place, particularly with the rise of meme stonks, being too engaged can hurt your performance over time. High-frequency monitoring can make you feel like your portfolio is doing worse than it actually is, which can lead to impulsive decision-making.
If you constantly check your stocks every minute or hour, you probably care a lot about your money. But, that can become a double-edged sword. Monitoring your investments is very responsible and helps you get insights into your finances. However, because you are emotionally invested, a red day in the market can cause you to feel upset or stressed for the rest of the day even if the amount lost is insignificant in the grand scheme of things.
The point is, your mood should not get dictated by how the stock market is doing on any given day. Do not tie your happiness to a company’s stock price. Money is a tool for financial freedom and opportunities, but it is not the solution to life. So, take the most positive risks you can while minimizing potential downsides as much as possible.
3. Be More Productive
Once you have done your research and decide to invest in a specific stock or index fund, there is no need to torture yourself by second-guessing your decision every day. If you constantly doubt yourself, you probably took on more risk than you can handle or made the wrong investment decision.
Even if you only check your stocks for five minutes a day, that’s 35 minutes in a week or ~30 hours over 365 days. In a year, you have lost almost an entire day and a half of your life to this task. If you are checking your investments for no reason, find something more productive to fill the time instead.
For example, you can take on a side hustle or learn new skills. When I first started investing, I was obsessed to the point where I would check my investments nonstop for hours every single day. While I still look at my portfolio quite often, I have since channeled some of that energy towards running this personal finance blog and doing a full-stack web development bootcamp.
Finding other ways to grow your income and build wealth will help you increase your net worth much faster than staring at your stocks. Alternatively, you can use this time to work on your health or relationships. Life is a constant tug of war between our present-day and the future we want to have. So, while you wait for your money to do its thing, build the life you want in the meantime.
4. Context is Key
Before investing in anything, always make sure you understand what you are investing in and the context. Investing is not just about picking winners. If everyone could be good at picking the right stocks, then there would be no need for professional investors, economists, fund managers, or financial advisors.
If you have a watchlist of stocks, do some research into each company on your list to understand their services or product offerings, leadership team, competitors, and finances. Are their products or services valuable? Are they an industry leader, or are their competitors outmaneuvering them? Do they have a strong leadership team that you trust your money with?
If a stock rises or falls, you have to look at the surrounding context before making an investing decision. Find out whether the general market is rising or falling, how the industry and its direct competitors are doing, and historical events. Understanding the answers to these questions will allow you to put your mind at ease and help you make wiser investment calls.
For example, if Tesla stock is falling, but all of its competitors, such as Nio, Xpeng, and Lucid Motors, are doing well, there is a high likelihood that Tesla will go back up shortly unless there are fundamental issues with the company. But, if an entire industry is doing poorly, such as the marijuana industry, that could be concerning.
5. Time in the Market Beats Timing the Market
You have probably heard of the saying, “time in the market beats timing the market.” While it is common knowledge that you should buy low and sell high, our emotions often get in the way of that. The challenge with investing is having conviction in your investment decisions and staying committed to your long-term investment strategy through the ups and downs.
If you are light years away from retiring, taking money out of the market when things are not doing so hot will mean that you will likely end up with significantly less money down the line. Of course, this does not mean that you should buy your stocks and not look at them for the next decade. Checking your portfolio regularly and rebalancing your assets as needed is crucial for building a well-rounded portfolio.
But, do not decide to buy or sell your positions on a price change alone. Always consider the context and factors that went into the price increase or drop.
How Often I Check My Stocks
Back to the statistic we threw out earlier about how 40% of Gen Zers and Millennials check their investments every day, I am guilty. I look at my investments in my individual brokerage account several times a day. But, there are several reasons why I do that.
I invest primarily in growth and tech stocks on my Webull account, which can fluctuate in price a lot on a day-to-day basis. So, I always have dry powder on the side to look for opportunities to buy dips on stocks on my watchlist when I think the prices have dropped below their fair value. I also plan on using investments in this account to pay for a home downpayment in the next couple of years. Because my time horizon is relatively short, I want to maximize returns on this account and make sure to rebalance my assets frequently.
On the other hand, for my Roth IRA and 401(k), I usually only check them once a month to track my progress and add the data to my financial spreadsheets. I invest primarily in broad market index funds in these accounts, so I do not feel the need to monitor them as often.
Now, you may be thinking – after everything I said in this article, why am I not following my recommendations?
And that is because I enjoy looking at stocks and find the stock market fascinating. I love learning about different companies, including the types of products and services they offer, their vision for the future of their industries, and how they can potentially change the world. I also like being in touch with current events and news, which is why I pay close attention to the economy and political landscape.
I also never sell my positions on emotions alone or let a red day bring down my mood for the rest of the day. Having invested a good portion of my net worth in crypto, I have become desensitized to volatility. Over the past year, I have watched some of my investments fall more than 40% in value in a short period. I have also watched some of my stocks and crypto 2x or 3x in weeks or months. While I am not an expert by any means, I have come to accept the fact that investing is like a rollercoaster, so I need to chill out and enjoy the ride.
The Bottom Line
Looking at your investments all the time can be tempting, especially if you are investing in volatile assets. But, research has shown us that high-frequency monitoring makes us more susceptible to irrational decisions and more losses down the line. In the case of investing, less is more. Once you understand your risk comfort level and set your long-term investment strategy, it’s time to sit back and trust the process. Be patient and let your money grow!