Do you know how your investments are doing?
We’ve talked before about tracking expenses, and how it can help you know where your money is going. This is of course important, as saving money is necessary for us if we want to reach the goal of financial freedom. That being said, saving alone might not be enough, as we need to make sure that we earn more than just a miscule amount each year in interest. Thus, we should allocate our investments in different classes.
In terms of those investments, they can be a big part of our net worth. Additionally, they can vary in value every day. Yes, some can change in value every single day. Much like our expenses, our investments can be dynamic in terms of what they look like from day to day, hour to hour, and in some cases – minute to minute. Stocks in particular can go up and down quite a bit, especially individual stocks.
Along those lines, how often do you check the value of your investments. All it takes a few clicks, and we can get this information real time. With our smartphones, we can check on our investments, and the markets in general, at just about any point in time. If someone is so inclined, they can check different markets globally at different times, as exchanges are in place around the world.
Personally, my current thinking is that it’s not necessary to check markets or investments daily, for the average investor. I would put myself in that category. It seems like once a month might be a good thing.
Now, that doesn’t mean that there aren’t opportunities to take advantage of certain situations. However, considering that index funds quite often beat actively managed funds, what makes a typical stock investor think that he or she will do so much better by actively trading as a daytrader? Additionally, there is a high level of effort involved with constantly checking investments and markets. Anyway, this is my currently line of thinking on this, and I realize that different people handle things differently.
This all reminds me of a guy I worked with years ago. He was constantly checking the market, multiple times a day, on his phone. Who knows how much time he spent doing that at his desk. All that time spent could have been put to better use, perhaps?