Before you began investing, what happened to the stock market didn’t really matter. It could go up, down, and every which way without a noticeable difference in your day to day life. Unless it was a symptom of a larger problem, like a recession where job security is at risk, it was mostly noise. All that changes when you have skin in the game.  When you have money invested and you see those little numbers whizzing by at the bottom of the tv all turning red, it can be an unnerving feeling. You’re not completely sure what it means for your account balance, but it probably isn’t good. Should you check?

One of the biggest struggles of investing is how often you should be checking on them. Too much and you might be enticed to make a rash decision that costs you long term. Too little and you might not notice that you are going to need to save more, or you have the luxury of spending more, leading up to retirement. It’s a balancing act between obsession and apathy. What’s an investor to do?

I’ll just take a peek    

Like passing the scene of an accident, everyone wants to see the damage. Why we do this to ourselves we may never fully understand, but online account activity always spikes during large market drops. As we check in to survey the damage our brains automatically start looking for the reg flags we missed. The guy on CNBC who predicted ten out of the last two recessions. The gal in the Facebook ad telling us to get out of the market and buy gold bars. Why didn’t we listen.

To make matters worse we start to imagine the possibility that things will continue to get worse. Soon we are convinced of it. Just as everyone expects a rising market to keep on rising, recency effect leads us to expect a falling market to keep on falling. If you believe that the market will keep falling, then the “logical” next step is to do something. Right?  

Here in lies the trap. If the market already dropped, do you bail out and absorb the small / moderate loss to try and avoid a possible huge one? What is the cost of being wrong? Before you peek make sure you know how you’ll react. Better yet, have a written plan in advance (more on that latter).    


Get that thing away from me


Perhaps the ostrich school of investing is more your style. Other than regularly scheduled contributions, bury your head in the sand for 40 years and only to emerge in time to claim your social security retirement check.  

There are obvious benefits to this method such as less stress, no risk of messing up a well-made plan, and fewer decisions to make. This is much harder to do in our ultra-connected society, but it certainly has its appeal.

If everything played out perfectly this could work. Unless of course you set your savings rate on faulty assumptions, like from some Yahoo Finance article.  Even worse, you swear you had set up your allocation into a target date fund only to realize ten years later that your contributions were actually going into the default money market fund yielding one tenth of one percent. If only you had checked earlier…


How often should I check my account balance?


The answer lies in the often appropriate, but universally hated, phrase “it depends”. We believe checking in on your account at least once a year is necessary to keep your investment process in line with your current risk tolerance and capacity. We also believe checking your account balance more than once a month can be counter productive to your psychological well-being. Anything in between is fine as long as you know yourself well enough to not make decisions based on your emotions in the moment.

When you do check in on your account you should already have a plan for what you will do, if anything, based on a series of outcomes. For example, if my portfolio, which started 50% in stocks and 50% in bonds, is off by more than 5% I’m going to sell the higher one and buy the lower one to rebalance everything back to 50% / 50%.

Setting a schedule with your financial adviser, or even with yourself or your spouse, to regularly review your financial accounts can be a good way to mitigate the desire to always check your balance while not dismissing your responsibility to stay on track long term. Once again, moderation is the key.