You’ve done your research and finally built your stock portfolio. You’re now probably eagerly watching your stocks to see how they would perform in the coming days.
While it’s good to keep an eye on your investments, it might not be a good idea to watch your stocks daily like a hawk.
So…
How often should you check your stocks?
You should check your stocks on a regular basis. If you follow earnings, once every three months would be a good range to start. If you’re a long term investor, you could do a portfolio review once a year.
That said, the frequency at which you should check your stocks depends on your investment strategy, goals, and personal preferences.
4 factors to consider for the best frequency to check your stocks
1) Long term or Short term investing?
If you have a long-term investment strategy and are focused on the overall growth of your portfolio over several years, you may not need to check your stocks frequently.
You can follow the stock’s earning calendar and check in on your portfolio once every three months. Or, do an annual portfolio review after your stocks have released their annual report.
Doing this will give you new data points to review your stocks and keep you updated on the business performance of the companies you own.
On the other hand, if you engage in short-term trading or have a more active investment approach, you might want to monitor your stocks more frequently.
If you’re a trader, its natural to be watching your stocks based on the duration of your trading strategy.
2) Risk tolerance
If you’re comfortable with market fluctuations and can withstand short-term volatility, you may not need to monitor your stocks as frequently. However, if you have a lower risk tolerance or are invested in more volatile stocks, you might want to keep a closer eye on them.
3) Market conditions
During periods of market instability or significant events (like the recent rate hikes) that can impact stock prices, it may be beneficial to monitor your stocks more frequently.
This allows you to react to any developments that could affect your investments.
4) Diversification:
If you have a well-diversified portfolio that includes investments across different sectors or asset classes, you may not need to monitor your stocks as often.
Diversification helps mitigate risks associated with individual stocks, making frequent monitoring less crucial.
Why should you check your investments on a regular basis?
As an investor, your aim is to grow your capital through your investments.
- Determine if your stocks are performing
The only way to know if you have met your objectives, is to review your portfolio and check your stock performance.
As stock movements can be volatile, you wouldn’t want to be stuck watching your stocks all day. Instead, decide on a regular interval, set a calendar reminder and check in on your stocks diligently.
This way, you will always know how well your stocks are performing, and whether your investment thesis still holds true.
- Rebalance
Rebalancing is the process where you get rid of non-performing stocks in your portfolio and add more of those that are performing for you.
The process of rebalancing when done right allows you to lock in profits and optimise your portfolio.
Why you shouldn’t check your portfolio too frequently?
Although you should check your stocks on a regular basis, doing it too frequently could have adverse effects.
- Making impulsive investment decisions
As mentioned above, stock movements can be volatile. If you’re watching your stocks on a daily or even hourly basis, you may end up making bad investment decisions as your emotions ride on the fluctuations of your stocks.
- Inefficient use of time
Unless you’re a full time stock trader, you probably wouldn’t have enough time to watch your stock and still maintain a balanced life.
Do yourself a favor.
Don’t get addicted to watching your stocks.
What if I can’t help but want to check my stocks?
It is normal to feel anxious about your stocks, especially if you’re new to investing.
You can get over the anxiousness by making sure that you have researched into the stock you buy. This way, you will be confident of your investing strategy.
If you still find that investing in stocks is making you feel uneasy or that you cannot sleep at night, investing in stocks may not be for you. And that’s okay. There are many options to grow your money, you may want to consider investing in passive ETFs or use a roboadvisor instead.
Conclusion
It is important to strike a balance between staying informed about your investments and avoiding excessive monitoring that can lead to emotional decision-making.
You may find it helpful to set a regular schedule, checking your stocks once every three months or once a year.
This allows you to maintain a disciplined approach without becoming overwhelmed by short-term fluctuations. Ultimately, the frequency of checking your stocks should align with your investment strategy and goals.