Maybe you just bought stocks or you’ve got some experience, but you’re wondering how often should you check your stocks.
It’s a reasonable question to ask. And I’ll answer it soon.
But what’s not reasonable is this:
- Making poor financial choices based on emotion
- Stressing over things you can’t control
- Letting a stock price hurt your productivity
I literally know people who will sit in front of their phone or computer and just refresh their stock prices, waiting to be stimulated with a new number. Sometimes they refresh the screen too fast for the stock price to move.
This is crazy. This is insane.
Because I’m sure they know this, but they sure don’t act like it: the stock price doesn’t change based on how many times they look at it.
Some people aren’t so over the edge as what I mentioned. But they will still spend time checking their stocks every hour or every day.
That’s too much!
Because once you make a decision to invest in a stock, don’t give yourself the torture of second guessing yourself every following hour or day.
If you are second guessing yourself constantly, you probably invested in the wrong stock.
(You could avoid all the second guessing and invest in Warren Buffett’s beloved S&P 500 Index Fund.)
Regardless of where you’re money’s invested, here are three reasons why I would never recommend checking your stocks every day.
1. Emotional Investors Lose Money
The absolute worst investing mistake is to buy high and sell low based on your emotions.
For example, if you see your stocks are down five days in a row, which is nothing in the grand scheme of things, your fear of losing more money could force you to sell at a loss.
But say day six rolls around and makes up the five days of losses. You didn’t get these returns because you sold too early.
Now you’re upset feeling that you’re going to miss more gains if you don’t buy back in, so you buy high.
And don’t forget that you’re also losing money from the transaction fees when you buy and sell.
Honestly, if you’re going to buy high and sell low, you’d be better off hiding your money in your bed sheets.
I mean come on, have some perspective and patience. Making money takes time!
Those that make money have a long-term perspective with their investments. And you don’t gain a long-term perspective by checking the stock price each time the hour hand turns.
The dude or chick who doesn’t check their stocks daily doesn’t have the temptation to sell their stocks daily. They aren’t emotional about their investments.
Not being emotional about your investments will also help you execute buy-and-hold investing, which works.
The buy-and-hold strategy is exactly what it says it is: You buy a stock, or a fund that holds a group of stocks, and you hold it for decades. I’m talking 10, 20, 30, or 40 years.
And when you hold onto your stocks for at least a year, you pay a lesser capital gains tax instead of your normal tax rate.
The main point here is that building a long-term mindset toward your money will help it grow, and short-term decisions based on emotions will hit your bank account hard. When you check your stocks daily, you set yourself up to make poor financial decisions based on emotions.
2. Don’t Stress When You Don’t Have To
The only reason you’d be checking your stocks by the minute, hour, or day is if you cared about your money.
And caring about your money is a responsible motive. I’m not knocking you for that. The world would be a better place if more people were responsible with their finances.
But because you care, you also have the tendency to let a stock’s performance influence your mood. If a stock is regularly down, many investors are depressed the rest of the day—even if they lost only a few hundred dollars.
It doesn’t help that research finds losing money hurts more than it feels good to make money.
And your mood shouldn’t be in the red each day you check a stock ticker and it’s in the red. That’s giving up power when you don’t need to.
Don’t chain your happiness to a company’s stock, or what affects it—global economy, globalization, and weather. That’s ludicrous.
If you want to be healthier and less stressed, don’t check your stock prices each day.
3. Be More Productive
Say you only check your stocks once a day. You’re quick about it and it only takes two minutes.
That’s not so bad, right? Wrong.
Two minutes a day times 365 days comes out to 12 hours you spent doing something you don’t need to do. Over two years, you lost 24 hours—an entire day of your life—doing an unnecessary chore.
For your own good, move on to do more productive things with your life than checking a screen.
If you’re not happy where you’re at financially, your time is better spent making money than checking how your invested money is doing.
Pick up a side income. Work harder at your main job.
These two moves will help you build progress to raising your monthly income faster than a stock.
Or use this time to get your health or relationships in order.
Gaining more time in your day is a clear win over knowing how your stock price moved over the last 15 minutes.
Here’s How Often You Should Check Your Stocks
I recommend you check your stocks once a month.
This is a healthy amount of time to see how your investments are doing without being obsessive or irresponsible. You need a healthy relationship with your money just like the people around you.
If the idea of only checking once a month makes you sick—meaning you just outed yourself as someone who checks by the hour or day—begin by checking once a week.
Then over time advance to checking once a month.
The prices will go up or down regardless of your awareness. So why not take advantage of the fact that stocks are low-maintenance? Index funds are especially low-maintenance.
Now there could be unique situations—maybe when you’re looking to buy or sell an individual stock—where it’s helpful to keep your eye on the price each day to make a move.
But in your average month, the common investor doesn’t need to check their stocks more than once a month.
I promise they will still be there when you come back. And if things go according to history, your stock prices will grow around 7% each year with or without your attention.
Want more strategies to reach financial freedom sooner rather than later? Order my book Freedom Money.