- I check the mail everyday.
- I check Google Reader twice per day.
- My email is in a state of “constantly being checked.”
- As a blogger and business owner, there are about 100 other things (revenue, traffic, incoming links, etc.) that I check fairly often.
And from what I gather, I’m fairly normal in this regard. For most people, if something is:
- Important to us,
- Easy to check, and
- Frequently changing/being updated,
…then we tend to check it frequently.
Account balances clearly fit all three requirements. There’s no way to argue that your IRA balance isn’t important. It’s no harder to check your 401(k) balance than it is to check your email. And your brokerage balance changes (sometimes dramatically) everyday.
And That Makes Investing Difficult.
Checking your portfolio everyday can get you into trouble. On a day-to-day basis, the fundamental returns (i.e., the earnings of the companies you own plus the interest on the bonds you own) are invisible. If we assume a fundamental nominal return of 6% per year and we assume 252 trading days per year, that works out to a daily return of just 0.024%. If you ask me, that’s basically invisible.
In an entire month, the fundamental return would be just half of one percent: still pretty close to invisible.
If you check your portfolio everyday or even every month, all you’re seeing is the noise. You can’t possibly notice the slight fundamental return that’s buried within a mountain of P/E-related effects. Yet, dividends and earnings growth are the primary drivers of long-term stock returns. They are what we should be paying the most attention to.
So How Often Should We Check?
Of course, you can’t completely ignore your portfolio. You have to check every once in a while to rebalance and to see if you’re on track to meet your goals.
As for me, I check 2-3 times per year. (One is scheduled; the others are because curiosity gets the better of me on occasion.) For my purposes, that’s plenty.
What about you? How often do you check your portfolio?
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Two to three portfolio checks per year sounds just about perfect to me.
Rob
I check my portfolio in the evening on the last day of the month. I update my net worth and make sure that all my deposits and dividends posted correctly. Other than that I don’t sweat if the numbers are lower, though lately they’ve been higher. Rebalancing over the years has kept my 401k higher than my investments.
Probably the 28th or 29th of this month I’ll do my annual birthday rebalance of my retirement accounts.
I check about twice a month, just to see.
It’s not real, though. It’s a virtual £15,000 in a ‘training’ account. The figures are real, the provider is real, just the money isn’t mine.
Shame, really. I’m 14% up on 2 months ago.
I check my portfolio once a month while updating my net worth.
Target retirement funds make life really easy.
Anytime I look at mint, my portfolio comes up, but I pay more attention to the value when I calculate my net worth at the end of each month.
I think being a young investor is what affects my frequency.
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