How Often Do You Check Your Portfolio?

March 28, 2018 - Max Osbon (2 mins to read)

The answer to this question can tell you a lot about a person. For many, it is “Always!”  Constant market checkers mentally recalculate their net worth every few hours and look for minute-by-minute trends to inform their next trades. For others, it is “Never!” Hoping to find bliss in ignorance, never-checkers leave their assets to fend for themselves. I suggest you find a strategy somewhere between these two extremes.

Less than always

We live in a world of unlimited information. If you want to watch the price of your favorite stock, commodity, or ETF all day long, there are fifty ways to do it. But that still doesn’t make it a good idea.

The trends you might see over the course of hours or days or even weeks may start to speak to you, but in my view, they don’t know what they’re talking about. Like watching television from an inch away, it’s hard to see what’s really happening when you’re too close. And more importantly, a short-term trend is not a reliable predictor of what will happen in the future.

If you are on continuous portfolio watch, trying to make sense of every short-term market move, I suggest you back off a bit. Instead, I encourage you to build a diversified portfolio based on the long-term tendencies of different asset classes…and check it quarterly or so. Discuss with your investment advisor a rebalancing strategy – a systematic approach to keeping your asset allocation in line with your long-term risk and return parameters.

And then, relax.

More than never

If you never go to the doctor, a silent disease can progress to a point where recovery is beyond reach. Similarly, a completely hands-off approach to investing may yield the same result: recovery beyond reach.

A portfolio left to its own devices – even one that was carefully diversified at inception – can turn into an unrecognizable monster over a few months. For instance, an asset allocation of 70 percent stocks, 20 percent bonds, and 10 percent commodities can quickly morph into a 55-30-15 allocation. 0r 80-10-10.

If you never check your statements, you may end up with a portfolio that has no connection to your goals and cash flow needs.

The prescription for never-checkers is the same recommendation I have for the always-checkers: diversify, monitor quarterly, and rebalance systematically.  Even if you have an investment advisor watching your assets, I encourage you to open quarterly statements and stay in touch with what you own and how it’s allocated to distinct asset classes. And demand clear information on expenses!

And then, relax.

Note: last November we mentioned 5 key IPO candidates for 2018. The first one to convert, Dropbox, a cloud data storage company, went public last week at $21 per share. It is currently trading at $30 giving Dropbox a market value of $13 billion.



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