It doesn’t seem likely but in fact, researchers have determined that is true – not necessarily in the way you thought!
Some clients feel slightly sheepish that they don’t pay much attention to their investments; others check their balances daily.
Is one behaviour better than the other?
In fact, behavioural science would say yes. This due to is the tendency to feel losses more strongly than gains. When people check in more frequently, and see balances varying, it has a tendency of making them more anxious, or perhaps gives them a feeling of lacking control. They then become more likely to make trade decisions not based on their long term goal, but instead based on their reactions to the market.
Studies do confirm that investors’ returns decrease with the frequency of online logins.
So often should you check? We would suggest you should check in at a rate at which you don’t become anxious. It may be with your monthly statements, or it may be with us on quarterly calls. We have heard one advisor recommending that you check your statements as often as you visit the dentist!
The bottom line: you want to know what you own and how those investments will help you achieve your long term goals. When you check your accounts, remind yourself of your goals and their timelines and remember that short term volatility does not correspond to longer term growth.