Key points

  • Checking your brokerage account enables you to make sure your portfolio is balanced.
  • You don’t want to check your account too often or you risk making bad decisions based on fear.
  • You should check around every six months to a year to make sure you have the right asset allocation.

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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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