How Often Should I Check My Investments?

How often should I check my investments?

By: Brian A. Magnan CFP®, AIF®, CEPA®

Director – Magnan Family Wealth Management

I certainly hear this quite a bit, so I thought it might be a good time to address it.

When the markets are up, it feels good to look at your accounts, but this can give you a false sense of security.  History has shown that the prices of our companies in the overall market can decrease by 20% to 50% at any moment. 

When the markets are down, it feels like the world is ending.  During declines in price of 20% or greater, losses tend to come in bunches.  Tracking the value of your portfolio too often during a decline may increase the chances of reacting to the decline and making a Big Mistake. 

So what is the Goldilocks amount?  The chart below is one of my favorites: “Probability of Positive Returns - S&P 500 Index - Since 1937.”  It is based on rolling periods of S&P 500 total returns from 12/31/1936–9/30/2026.

Daily checking has about a 50/50 chance of being up or down on any given day.  A coin flip might be as accurate a predictor as anyone for determining the direction of the rate of return on a daily basis.

Quarterly observations show on average that for any three quarters, two of them will be positive and one negative.  Two steps forward, one step back - feels like a metaphor for life.

Annually has a successful positive rate of return close to three out of every four years. Think of anything that happens in four-year increments - Leap Year, US Presidential Election, Olympics, or World Cup - history shows it is most likely there will be one negative year and three positive years in between those four year events.

This pattern suggests that, historically, giving a well-diversified equity portfolio more time has generally increased the likelihood of a positive return.

Past performance is not a guarantee of future results.