How Often Should You Check Your Financial Portfolio? :: Wamhoff Financial & Accounting


How Often Should You Check Your Financial Portfolio?

Ask anyone how often you should check your portfolio and you’ll get answers ranging from every hour, to every month, to never. So what is the right approach? Bob Wamhoff, president of Wamhoff Financial Planning & Accounting Services, provides some advice.

Keep Your Balance

  • Factors such as your age and risk tolerance will help determine what mix of stocks and bonds are appropriate for your portfolio.
  • Keep in mind – people are living longer so old rules of thumb may not be applicable any more.
  • An investment professional can help determine the right mix so that you can stay balanced throughout various market ups and downs.

The risks of checking too often

  • You’ll be tempted to reposition too often, not focusing on your long-term plan, and may not make the wisest decisions
  • Too many changes will not allow your allocation mix to work appropriately, and could result in many fees and charges to make the changes
  • The market is going to have ups and downs. Watching it too closely will out you unnecessarily on a big emotional roller coaster.

The risks of not checking often enough:

  • The old mindset of investing was a buy-and-hold strategy, where you set your investments and let them ride out over time. In today’s market, this is no longer the appropriate thing to do.
  • Your portfolio will not be appropriately balanced, which, in the long term, could put you at great risk if you’re too heavily invested in one sector or investment class.
  • You don’t know if you’re meeting your goals.

Find the middle ground:

  • Check it as often as you like, but don’t make any moves based on your emotion at that time.
  • Repositioning can happen quarterly at the very minimum, but in most cases, it’s most appropriate to reposition yearly.
  • Dollar cost averaging into your portfolio will help temper the market swings over time. Please be aware, however that dollar cost average cannot eliminate the risk of investment losses and in declining markets you should consider your ability to continue to invest.
  • Have a plan. This plan should include your goals, and how you’re going to track your progress – including how often you do a portfolio review and reposition your assets.