How often do you look at your investment portfolio?

I have a pension account (I have 4 different policies actually) and an investment account. Both are invested in the same passive global equity fund. The pension, I can’t access until I am 60 years of age, the other I can access at any time but it is there for long term savings. So why do I look at the investment account on a regular basis but the pension account about once a year?

It’s worse than that for some and it tends to be those with stock options. I have talked to clients who check their company’s stock price several times a day. Never mind that stock options aren’t actually worth anything until they vest, what benefit is there in checking the share price several times a day? An angry Donald Trump tweet can effect a share price, if only temporarily. So is your mood going to be altered by someone’s twitter feed?

We all like to see our investments increasing in value but looking at the value of a long term investment on a regular basis will drive you crazy. And if you act on it, it will ultimately cost you a lot of money and further regret.

The risk tolerance company I use, Finametrica , provide statistics on how often an investment is falling, recovering (growing after a crash but still below the initial investment amount) and rising. The figures below are for a 100% equity portfolio and the data is from 1 January 1970 to February 2018. If you check your portfolio just once a month, it is only growing 33% of the time, whereas if you check it once a year it is increasing 67% of the time.

Imagine the difference in your mood if most of the time your investment is doing well and making you money. What if you were checking the share price daily? Valuations would be all over the place and so would your mood, you would be distracted and it will effect your productivity.

It is hard to change your behaviour, especially when the figures are large but checking share values frequently is not good for you. Long term investments should be treated as such. There’ll be ups and downs along the way but if you are invested in quality, they will come back. Not need to be checking in on them so often.

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