I’m not kidding or exaggerating when I suggest that people ignore what the market does from day-to-day, month-to-month, or quarter-to-quarter.
As far as I’m concerned, two glances at my portfolio each year is plenty. Now, before you decide I’m completely crazy, let me remind you that I’m not alone. Some respected investors hold similar opinions:
“Try and avoid the worst hazards of behavioral investing. Follow the basic rule that I follow: Don’t peek. Don’t look at your account. Throw the 401k statement in the trash when it comes.” -John Bogle in an interview with Steve Perlstein.
“The investor with a portfolio of sound stocks should expect their prices to fluctuate and should neither be concerned by sizable declines nor become excited by sizable advances. He should always remember that market quotations are there for his convenience, either to be taken advantage of or to be ignored.” -Benjamin Graham in The Intelligent Investor
Why not check more often?
I’ve always been of the opinion that information is worthless unless it’s actionable. So as far as I can tell, there’s absolutely no good reason to check your account value aside from during your scheduled rebalancing & goal assessment checkups. All that will come from extra checking is extra worry (and perhaps, therefore, a mistake you’ll regret later on).
Part of the reason I don’t check more frequently is that the bulk of our retirement accounts are invested in a “LifeStrategy” all-in-one fund from Vanguard that keeps our asset allocation close to where we want it.
However, from what I’ve read, there’s no predictable benefit from rebalancing more frequently than once per year anyway. So even if you do your rebalancing manually, there’s little reason to check your portfolio more than a couple times each year.
Some people might find it difficult to avoid peeking at their account balances given the constant flow of news about the stock market. Here’s how I do it:
- I don’t read the newspaper.
- I don’t listen to the radio.
- I don’t watch TV.
(Though in all honesty, my reasons for removing those activities from my life has more to do with thinking that they’re a waste of time than it has to do with investing.)
What do you think?
How often do you check your own portfolio? Do you think you’d benefit from cutting back on that frequency? (And do you think you’d be able to?)