How often should you check your brokerage account balance?
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Online brokerage accounts made it super easy to log in and check your account balance in seconds. But while it’s tempting to check your investments daily – or even more often – doing so isn’t necessarily the best idea.
In fact, it’s a good idea to be strategic about how often you log into your broker’s account to see how your investments are doing.
Signing in too often – or not often enough – to your brokerage account could cost you money
So how often should you check your account performance? For most investors, it is ideal to do this about once every few months.
Registering in your brokerage account once every few months allows you to:
- Make sure your portfolio is balanced – often some of your investments outperform others and your portfolio may end up focusing too heavily on those investments. This may put you at more risk than you should be exposed to. You’ll want to check your account balances every few months or so to determine if your portfolio needs to be rebalanced to be better diversified.
- Confirm that you are exposed to the right level of risk: you need a mixture of high risk investments which have the potential to produce better returns and less risky and safer investments. The level of risk you can take will change. As you get closer to when you have to rely on investments to generate income, you become less able to wait for downturns. It is therefore important to check your portfolio about once a year to make sure it matches your current risk tolerance.
- Reaffirm your commitment to your investments: You want to invest for the long term in order to maximize your chances of building up your assets. But that doesn’t mean you should never sell assets. Checking every few months or so allows you to confirm that you are still confident that the companies you invest in have strong potential for the future.
However, you usually don’t want to check your account balance every day or even every few weeks. This creates an unnecessary risk that you overreact to fluctuations in the price of your investments which may occur as a natural part of market fluctuations.
Selling assets due to short term market trends almost guarantees that you will end up with a losing investment strategy. This is because you will almost always end up reacting after your stocks start to fall and you could sell and lock in losses as a result. Or you could be missing out on potential earnings by selling at the first sign of profit when there is a chance to make a lot more money.
Now, if you know that you can be disciplined enough to avoid making decisions based on short-term price movements and find it fun to check your portfolio, then it’s not necessarily the worst thing in the world to check. more often.
But watch for signs that you are becoming too obsessed with daily performance tracking; are tempted to react to daily movements; or confuse losses and gains on paper with permanent changes in your wealth. If these things start to happen, take a step back and avoid logging into your brokerage account as often as you have.
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