Personal investors are warned against checking their investments too often, in case the long-term view gets compromised. Even a minimum timeframe of three years is associated with the lowest risk Vanguard LifeStrategy fund.
According to a Google search on ‘how often should I check my investments?’, Hargreaves Lansdown suggests that reviewing twice a year is “sensible”. For long-term investors, Aviva’s Wealthify cites a range from once a month to once a year.
But a prevalence of investing apps is making it easier for users to check their portfolio more often, and even multiple times a day, if they want to.
A third (35 per cent) of investment app users check their portfolio balance everyday, with one in 10 checking it multiple times daily, according to a survey by Behind Logins for investing comparison platform Investing Reviews.
The ability to also sign into an investment account on your phone with a fingerprint means that not even forgetting your password can prevent you from seeing how your investments are performing.
Being interested and engaged
While many would frown upon checking a personal portfolio so frequently, the Association of Investment Companies has linked checking investments regularly with feeling interested and excited.
Young investors are highly engaged, the AIC notes, after its survey found that almost six in 10 investors between the ages of 20 and 40 had checked their investments during the past week (57 per cent). Another three in 10 had checked their investments during the past month (29 per cent).
Indeed, frequently checking how your portfolio is doing may not always be such a bad thing. If somebody has a greater inclination to check their investments, it does not necessarily mean they also have a greater propensity to panic and sell at a loss.
And with the regulator wanting to see more consumers investing rather than sitting on too much cash, perhaps some savers want to see how their decision to invest is paying off.
They may see that their investments have gone down in value, but they would have been warned of this before committing their money to the market. And if they are checking their portfolio on a regular basis, they are likely to have seen, and so be reassured by, the ups too.
So if people like to check how their investments are performing more often than is recommended, and it is because they are interested and engaged, then it is not automatically a bad habit.
If investing is for the long-term, then one of the few ways to stay engaged is to see how your portfolio is doing.
If someone’s investment goal is to buy their first home, then understandably they will want to see if they are getting closer to reaching it.
Or if the investment goal is retirement, then some would see it as wise to keep an eye on whether there will be enough for when the time comes.
Research by Standard Life found that three in four people (75 per cent) do not know how much they have in pension savings.
And while the general guidance for personal investors is to check their portfolios infrequently, for fear that they may pull their money at times of poor performance, the reverse could also be argued.
For some investors, particularly those who are newer to the market, seeing how the value of their investments can go up could encourage them to stick with it, and to invest a little more.
Chloe Cheung is a senior features writer at FTAdviser
