It might look like a good idea to check your investments daily, or even several times a day. After all, you’d like to know how they’re doing, right?
However, depending on how you are as an investor, checking your investments every day might not actually be a good idea.
What might happen
If you see a big change in value, you might believe that it is a sign of how that investment will perform in the future. If the value drops, you may feel that you should pull your money out right away, before it goes even lower.
The losses or gains may indeed be the start of a lasting trend for that investment. However, they could instead be the market’s knee jerk reaction to some related news or sentiment that has little to no actual impact on the investment’s potential now and in the future.
Acting on the change by making a snap judgement could lead you to put in more money than you planned to, or might cause you to pull your money out and making your paper loss an actual loss. Either way, you may end up not following your investing strategy and so make it more difficult to achieve your money goal.
What you should do instead
If you check your investment periodically instead of daily, you’ll be able to look at how the value changed over time. This allows you to see actual long-term trends and differentiate them from short-lived market reactions which don’t really reflect on the investment’s potential.
Knowing these long-term trends allows you to make measured, informed decisions on what to do with your investments.
If you can’t keep yourself from checking daily, you should at least keep yourself from making knee-jerk reactions that could be bad for your portfolio. Instead, learn what’s causing the change, find out if it is likely to be temporary or long-term, then see the best way to respond (you can find out more here).
So unless you are a short term trading trying to take advantage of volatilities, it might be best for you, your time and your mental health to schedule portfolio checks at most every payday or so.
