The myth
After making that first investment, it can be very tempting for a beginner to keep a close eye on it and watch it grow. Some may also want to stay updated so they can reduce any potential loss by pulling their money out if the value starts to dip.
That’s why many people believe that you should always check your investment’s performance.
The reality
Although it’s good to know how your investments are doing, checking very often could be bad for your portfolio, especially if you’re a beginner who’s supposed to set a long-term view on investing.
That’s because you might see changes in the value and make snap judgements, even if these changes won’t really affect the investment’s growth potential.
This emotional approach to investing can lead to you not following your investing strategy and so make it more difficult to achieve your money goal.
Checking your investment periodically instead of daily can show you how the value changed over time. That makes it easier to see if the movement is a long-term trend or just a short-lived market reaction, and to make measured, informed decisions on what to do with your investment.
Verdict: It depends.
Checking your investment too often (like daily) could cause you to react to changes in the value based on your emotions. Periodic checks are a much better way of staying informed, especially if you don’t have much investing experience.
You could use the time that you aren’t checking to increase your knowledge of investing or perhaps scanning the market for other possible additions to your portfolio.
Expert traders, however, may choose to take a look more frequently, especially if they are the type who actively manage their investments. They can do this because they’ve learned how to do rational (and not emotional) investing, and also because their strategy often calls for it.
