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Checking your investments regularly can help you achieve your long-term financial goals. Even if you don’t make changes, you want to be sure your portfolio stays balanced and that it’s still in line with your long-term plans. Often, five minutes is all you need to make sure everything is in order. Here are some ways to determine if your investments are on track and make adjustments if necessary.
Portfolio tracking apps
Several portfolio tracking apps allow you to monitor multiple investments in one place. Empower (formerly Personal Capital), Simplifi by Quicken and Intuit Mint are a few examples of products that let you quickly view all your investments in one dashboard.
For example, with Empower, you can see your individual account balances, combined balances by account type (investments, credit cards, etc.) as well as your total net worth. Empower and most other portfolio tracking products usually have mobile apps as well, which allows you to check your investments on your phone and your computer.
Alerts and notifications
You can set up alerts and notifications on your investment account to inform you of important changes and events. For example, you might set up alerts for specific price changes, account activity or market news. Once you set up your alerts, you may receive a message via push notification, text message or email if the conditions are met.
Many investment platforms have widgets you can add to your dashboard for viewing certain information. These widgets are usually customizable and can be configured to see details like your total portfolio value, gains or losses and asset allocation. You also add or remove widgets so you only see the information you’re interested in.
Most investment platforms allow you to set up watchlists to track stocks, bonds or ETFs that interest you. Investors use watchlists to track portfolio performance or identify trading opportunities. Often, watchlists will be groups of similar stocks, such as “best growth stocks” or “best large-cap stocks.”
Some investment funds send weekly newsletters that highlight important market developments. If you have an account with the fund, you might also be able to receive weekly summaries that include your portfolio’s performance or other relevant updates. You can quickly skim these emails for the information you need.
Market news websites and TV
You can find market snapshots on websites like Google Finance. These sites will give you basic information, including major stock indices, individual stock prices and market updates. You can find similar information by tuning in to market news shows on TV.
What to remember while checking your investments
Checking your investments is about more than just reviewing current asset prices. You should also be sure your portfolio is set up the right way. A common mistake investors make is to transfer money into an investment account, like a Roth IRA, but then never invest the money.
After moving money into your account, you should then put the money to work by buying stocks, bonds, mutual funds, ETFs or whichever type of investment best suits your goals.
Similarly, you should ensure your 401(k) contribution percentage is correct. The best practice is to contribute as much as you can to the account. If your employer offers matching contributions, aim to contribute at least enough to get the maximum employer match.
You should also check your portfolio allocation. If you are in your 20s, most financial advisors would recommend a high allocation of stocks and a lower allocation of bonds. As you get older, they might suggest a higher allocation of bonds. As you check your investments, look to be sure your asset allocation is in line with your goals.
What to ignore during a quick check
The financial markets are complicated and change every day. While there is a ton of information to absorb, it’s best to ignore much of it, at least when doing your five-minute check. For example, don’t let yourself be swayed by the following:
- Short-term fluctuations: Investments like stocks can experience a lot of short-term fluctuations. If you see a lot of red numbers, you might worry and think it’s time to sell. But if you are investing for the long term, these small drops during the day probably shouldn’t affect your long-term decisions. Remember, investing is a long term game, so stick to your strategy and don’t get bogged down in the market fluctuations.
- Media noise: There can be a lot of eye-catching headlines in the media, and financial news is no exception. Headlines might use a lot of dramatic words that aim to grab people’s attention. However, the reality is often more nuanced, and you shouldn’t let attention-grabbing headlines influence your decisions.
- Other people’s portfolios: You might have heard a friend or colleague talk about how well their portfolio is doing and wish yours was performing as well as theirs. But this can lead to chasing higher returns, which is often a losing strategy for investors. Avoid comparing yourself to others and focus on making the best choices for you.
While there are many things to consider when checking your investments, ignore any day-to-day changes in asset prices. Focusing on what matters can help you make the best decisions.
Investing can be complicated, and you may not know where to start when checking your investments. Fortunately, several tools are available, such as portfolio tracking apps, watchlists, and alerts to help you hone in on the right information. Also, remember to check that accounts like your Roth IRA and 401(k) are in balance. Lastly, avoid letting things like short-term fluctuations and media noise influence your decisions. Instead, focus on the long-term plan you have made for your portfolio and your retirement.