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How often should you check your portfolio?

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.

Staying Oblivious

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?)

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Comments

  1. Miranda says:

    Every quarter I receive statement from my IRA. I look and then file the info away. Other than that, I rebalance my other stuff when I do my semi-annual “state of my finances” check-up. But I rarely really have much rebalancing to do…

  2. I rarely check my 401(k) usually on big swings, which I think you would agree is the worst time. That being said, I don’t touch the 401(k).

    My trading portfolio (just a couple grand) I look OFTEN! VERY OFTEN!

  3. The only reason I can think of to look at your account more often is to make sure all transactions are going through correctly. It’s much easier to get a mistake fixed early on rather than several months later.

    But other than that, I completely agree with what you’ve said. And I really agree with your statement about newspapers, radio, and TV!!!

  4. Hi Paul. Good to have you back writing and commenting again. :)

    You bring up a good point about checking for transaction mistakes. There’s no doubt about it–those things can happen.

  5. You hit it on the head when you say that “information that is not actionable is worthless,” Mike.

    If we all looked at our portfolios only twice per year and took the time we saved by not following daily market events to come to a deeper understanding of how the stock market really works, we all would be better off.

    This is Bogle’s most important insight, in my assessment.

    Rob

  6. I do disagree with your decision not to read the newspaper, watch tv or listen to radio.

    Ignoring just how awesome such shows as Big Brother and Win a date w/ Tila Tequila… I would argue staying current in news is useful. At the very least daily show gives me laughs.

  7. This is not a criticism, but I’m hoping it’s a discussion:

    How do you know whether the information is actionable if you refuse to see what information is available? Is it good enough to just follow John Bogle?

    Doing nothing is a decision. It is an action, and to me, you are taking that action in the blind.

    If you digest the information and then decide to do nothing, that’s reasonable. But why would you assume you are going to take no action? Based on what? Your belief that once per year is sufficient?

  8. SJ: I do read Google News a couple times per week. Though:
    a) I have it set not to show any business news, and
    b) I’m becoming less and less convinced that there’s really that much value there regardless.

    Mark: You raise a good point. Until looking at a piece of information, it can be difficult to determine whether it’s actionable.

    I would, however, argue that it’s not impossible. For example, I know that I would do absolutely nothing with information regarding who won the last American Idol series.

    So, how have I determined that twice per year is sufficient? Because I’ve been told by people more educated/better informed than myself (namely, William Bernstein, Rick Ferri, and Larry Swedroe) that there’s no reason to think that rebalancing, say, quarterly is likely to achieve better results over a given period than rebalancing annually.

    Admittedly, it’s a bit of a cop-out. I haven’t personally done any studies to verify the accuracy of their statements. (Nor, frankly, would I even be clear on how to go about doing so.) That said, from what I’ve read by each of them, I believe that I have every reason to extend them my trust.

  9. I find it easy to ‘know’ that you won’t ‘do’ anything. But somehow, I’d want to be certain. I also have a fascination with numbers that would make me want to see.

    I guess the bottom line is that you would not take any action, so what’s the point in looking. That shows remarkable self-control or perhaps disinterest. However, it does go with your title.

    This is truly a case of ‘to each his/her own.’

    Regards,

  10. I check my retirement accounts ( Fidelity and Vanguard) monthly for accuracy of deposits and to update my net worth.

  11. I honestly like to watch the numbers go up and down. I check all the time. Even with the recent huge downturn in the market, I didn’t feel a compulsion to do anything. I’m also investing new funds regularly, as part of a monthly discipline, so I have to look at my account to do that. And anyway, when the market is going down it makes me feel good that I’m buying low. I find it more painful investing when the market is going up. But I don’t hesitate.

    Perhaps I just have a very dispassionate relationship to the overall balance of my funds. I also started investing in 1999, only to experience two insane bubbles in the U.S. and an essentially lost decade. So although I believe intellectually in the longterm benefits, on an emotional level my expectations are really low.

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