No, you shouldn’t check your investments daily or weekly. Daily stock market fluctuations shouldn’t be an alarm if you plan to use your money after seven years or more. The swings are just for a short time, after which investments typically revert to their long-term growth trends.
How Often Should You Check Your Stocks?
Instead of checking your stocks every day, consider these tips:
1. Invest in a low-cost diversified index fund. This will spread your money across the entire market eliminating the need to pick individual stocks.
2, Automate your investing, This will ensure you’re consistently investing your money without having to chase stocks or rely on guesswork,
3. Check your stocks once or twice a month. This will give you enough time to see how your portfolio is performing without getting caught up in short-term fluctuations.
Why Checking Your Stocks Every Day is Bad
Checking your stocks too frequently can lead to several negative consequences:
1. Emotional Investing: You might make impulsive decisions based on short-term market fluctuations, leading to underperformance and missed opportunities.
2. Stress and Anxiety: Constant monitoring can cause unnecessary stress and anxiety, even if your portfolio is performing well.
3. Missed Opportunities: Focusing on short-term fluctuations can distract you from your long-term investment goals and prevent you from making sound investment decisions.
3 Reasons to Stop Checking Your Stocks Every Day
Here are three key reasons why checking your stocks daily is detrimental to your investment success:
1. The Market is Mostly Noise: Daily market movements are often random and unpredictable. Focusing on them can lead you to make emotional decisions based on short-term noise rather than long-term trends.
2. Professionals are Almost Always Wrong: Even professional investors and analysts struggle to predict market movements accurately. Trying to time the market based on daily fluctuations is likely to lead to losses.
3. Long-Term Investing is the Key: Successful investing is about building wealth over the long term, not chasing quick profits. Checking your stocks daily can distract you from this goal and lead to impulsive decisions.
Additional Resources
These additional resources can help you learn more about investing and avoid the pitfalls of checking your stocks too often:
- Forbes: Three Reasons to Stop Checking Your Stocks Every Day
- Investopedia: How Often Should You Check Your Investments?
- The Motley Fool: Don’t Check Your Portfolio Every Day (Here’s Why)
By following these tips and avoiding the temptation to check your stocks every day, you can set yourself on the path to long-term investment success. Remember, the key is to stay focused on your long-term goals and avoid getting caught up in the short-term noise of the market.
1. Earnings season. Earnings season brings the possibility of big price swings for all stocks, but growth stocks are especially vulnerable. So you need to know when your companies are going to release their quarterly/annual results and watch the reaction to the news very carefully. Some companies announce the date for their earnings reports far in advance and some seem to delight in just springing them. It’s always a good strategy to look at the date for the most recent report and then pencil in a date three months later. And, of course, you need to have a plan for what you will do if the reaction is bad.
And increased volatility means having to pay more attention. However, the level of attention you receive will depend on how forceful your shopping style is. Day traders have to pay attention all the time. Period. By the end of the day, the majority of day traders zero their accounts. Some won’t even take a coffee break unless they sell everything first. This is not a lifestyle I envy.
3. Just before you buy or sell anything. Right after you purchase a stock, when there is no profit cushion to safeguard your position, is when you are most exposed. Therefore, you should carefully consider the state of the market before investing. Generally speaking, you should be aware of these outside forces, just as a sailing ship’s captain is aware of the tides and the winds before weighing the anchor and setting out to sea. Are markets in a supportive trend? Are any big data releases scheduled soon? Is a Fed meeting approaching?
The lengthening of your holding period may be greater if you’re an income investor. The dividends your stocks or funds pay should be your main concern. While many bond funds pay monthly, most companies only declare dividends up to four times a year. Therefore, you should be good if you check your mail (or email, or bank statement, or broker’s report) and make sure the dividends are still coming in.
A value investor’s investment horizon is typically a few years. It will likely take some time for the inexpensive stocks you purchase—with solid fundamentals and promising future—to reach their full valuation. So long as you monitor prices every few weeks, everything should be alright. You don’t need to worry about your portfolio when you go on vacation.
My father, who typically only purchases mutual funds, purchased some shares of Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) after I told him about a year ago that I thought the company looked attractive. The very next day, the stock dropped by more than 2%, costing him (on paper) a couple hundred dollars. He called me right away to say I might have given him bad advice.
I’m not advocating that you buy stocks and set them aside. It’s crucial to periodically review them, but even more so, stay informed about the company’s most recent quarterly results and other news to ensure your original purchasing motivations are still valid.
I told him he was missing the point. Timing the market is a losing battle, and keeping an eye on your stocks all the time can be detrimental. In particular, feelings can lead investors to act rashly and contrary to their best interests. When stocks fall quickly, emotional investors panic and sell. However, when stocks rise quickly, investors see that everyone else is doing well and decide to purchase
I Check My Stock Portfolio Every Day And It’s Making Me Uneasy!
FAQ
How often should you look at your stocks?
Should I check my investments every day?
How often should you check your shares?
How do I know if my stocks are doing well?
Is it good to check on your stocks each trading day?
Like looking at social media, checking on your stocks each trading day is addictive. However, again, like checking social media, it’s not necessarily good for you. There are a few reasons why your time may be spent on other things rather than monitoring daily stock movements. First, looking at your stocks more may simple encourage more trading.
Is it bad to check stocks too often?
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.
How often should you check your stocks?
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.
Should you avoid checking stock prices for a month?
If, for a month, you avoid checking stock prices, you could very easily pull together a useful investment plan with the time you could save. Unlike, randomly glancing at stock prices, an investment plan is more likely to help you on the way to meeting you investment goals.