It's a good idea to have money in a brokerage account so you can earn returns and build wealth. And once you've opened up your account with a broker, it may be tempting to check in on it regularly to see how your investments are doing. But, is that really a good idea?
It's important to make an informed choice about exactly how often you should check your brokerage account, as it may not be as often as you might think.
Here's how often you should check in on your brokerage account
Generally, it's a good idea to check your investment account around every six months to a year. This may seem like a long time, but there are good reasons for it.
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The biggest reason not to follow the performance of your account too closely is that doing so can lead you to make decisions that cost you. The best and most proven way to consistently build wealth by investing is to pick solid investments and then leave your invested funds alone -- ideally, for many years. But, if you're checking in on your account too often, it becomes harder to do that.
If you check your brokerage account regularly, you may see that you've lost money on a particular investment and become afraid you'll keep on losing, leading you to sell in a panic. The problem with that is, you'll miss out on any potential recovery, guarantee you sell low, and lock in your losses that you might have gained back over time.
On the flip side, if you've made money on a particular investment, then you may decide to buy more of it -- which could mean buying at a high. Or, you could decide to cash in on the investment and pocket the gains you already have -- but could then miss out on more future returns.
You don't want to react based on decisions made out of fear or greed, and it's more likely you'll do that if you're monitoring your investment performance too closely.
Why check in once every six months to a year?
Checking in on your account balance around every six months to a year is a good practice not because you necessarily want to sell your investments at that time. Instead, it's appropriate to take a look at your account at around this time interval so you can rebalance your account as needed.
As the Securities and Exchange Commission explains, "Many financial experts recommend that investors rebalance their portfolios on a regular time interval, such as every six or twelve months." Rebalancing means adjusting your investment mix so you have a diverse pool of assets, and the right types of assets.
The rule of 110 says you should subtract your age from 110 and have that percentage of your portfolio in stocks. Since your age is changing, you'd want to sell some stocks each year as you get older and get closer to the time you'll need your invested funds to support you.
You also don't want your investments too heavily centered around one stock, or even one industry or type of assets. But, this can happen over time if some of your assets outperform. If you make a lot of money on one fund and lose a lot of money on another, soon that well-performing fund will dominate your portfolio and make up too large of a percentage of it. In this case, rebalancing would mean selling some of the well-performing fund in order to diversify.
By checking in around every six months to a year, you can make the right decisions to maintain a good asset allocation, but you won't be overly tempted to react to short-term events in a way that costs you.
Remember, your brokerage account isn't a savings account for short-term goals that you need to always know the balance of. Money you invest should be there for the long term, so take the long view in deciding how often to keep tabs on how it's doing for you.
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FAQs
Here's how often you should check in on your brokerage account. Generally, it's a good idea to check your investment account around every six months to a year. This may seem like a long time, but there are good reasons for it.
How often should you check your brokerage account? ›
For most investors, it's ideal to do so around once every few months. Checking in on your brokerage account once every few months enables you to: Ensure your portfolio is balanced: Often, some of your investments outperform others and your portfolio can end up too heavily concentrated in those investments.
How often should I check the stock market? ›
“Looking at it monthly keeps an eye on the prize, because at the end of the day, we're all working toward retirement,” Quevedo said. “So that should be your focus on a monthly basis.” Getting that monthly snapshot can also help you see how financial products, stocks, funds or other assets are doing compared to others.
How often should you look at your investment portfolio? ›
How often should you check your investments? As a rule of thumb, check your investments every one to six months. Anywhere within that time frame will keep you up to date on your portfolio, without causing unnecessary stress. Some investors go with once per quarter as a happy medium.
How often should you check your net worth? ›
It's a good practice to calculate your net worth on a yearly basis.
Is it safe to keep more than $500000 in a brokerage account? ›
They must also have a certain amount of liquidity on hand, thus allowing them to cover funds in these cases. What this means is that even if you have more than $500,000 in one brokerage account, chances are high that you won't lose any of your money even if the broker is forced into liquidation.
What is a good amount to have in a brokerage account? ›
Some experts recommend at least 15% of your income. Setting clear investment goals can help you determine if you're investing the right amount.
Should I look at my stocks every day? ›
Checking your investments too often could lead to emotional decision-making — and big losses. Investing should be a long-term game, so choose companies and funds you can stick with.
How do I know if my stocks are doing well? ›
Compare your stocks' performance against benchmarks, or stock market indices. Review stock indicators, including Earnings Per Share (EPS), Price to Earnings (P/E) ratio, Price to Earnings ratio to Growth ratio (PEG), Price to Book Value ratio (P/B), Dividend Payout ratio (DPR), and Dividend Yield.
How often should your money double in the stock market? ›
All you do is divide 72 by the fixed rate of return to get the number of years it will take for your initial investment to double. You would need to earn 10% per year to double your money in a little over seven years.
The three-fund portfolio consists of a total stock market index fund, a total international stock index fund, and a total bond market fund. Asset allocation between those three funds is up to the investor based on their age and risk tolerance.
What is the 4 rule for portfolio? ›
What does the 4% rule do? It's intended to make sure you have a safe retirement withdrawal rate and don't outlive your savings in your final years. By pulling out only 4% of your total funds and allowing the rest of your investments to continue to grow, you can budget a safe withdrawal rate for 30 years or more.
Is it realistic to have 100% of your portfolio in stocks? ›
If you take an ultra-aggressive approach, you could allocate 100% of your portfolio to stocks. Being moderately aggressive. move 80% of your portfolio to stocks and 20% to cash and bonds.
What net worth is considered rich? ›
For example, individuals with $1 million in liquid assets are generally classified as having a high net worth. To be considered very high net worth, one might need assets ranging from $5 million to $10 million, while an ultra-high net worth status could require $30 million or more.
What should be my net worth at 50? ›
“If I were to give a rough estimate, I'd suggest having at least $500,000 in savings by your 50s and ideally pushing toward a million or more. This should encompass cash, stocks, your 401(k) and any home equity, minus your debts and mortgage.”
What is the average net worth by age? ›
Net worth is the difference between the values of your assets and liabilities. The average American net worth is $1,063,700, as of 2022. Net worth averages increase with age from $183,500 for those 35 and under to $1,794,600 for those 65 to 74. Net worth, however, tends to drop for those 75 and older.
How often do you monitor your portfolio? ›
A: The frequency of portfolio monitoring depends on your investment strategy and personal preferences. Some investors check their portfolios daily, while others review them weekly, monthly, or quarterly.
Should I keep all my money in a brokerage account? ›
If you've got a large chunk of cash, you might secure better returns outside of a brokerage account. You could lose money. If your money is swept into a money market fund, that cash won't be insured by the FDIC or SIPC. It's possible to lose money.
How often should you check your account? ›
You should monitor your checking account at least once or twice a week. The more activity and transactions you make, the more often you should check your account. You should check your balance and your transactions for accuracy.
How long do you have to keep money in a brokerage account? ›
It generally isn't wise to invest money you need within the next five years. If you're saving for a short-term goal, skip the brokerage or investment account and consider these options for short-term investments.
