Regularly checking your stock portfolio is necessary to monitor your progress, close out losing positions, sell covered calls, and lock in profits when certain stocks get overbought. This article will discuss the optimal strategy for checking your stock portfolio.
Create a Regular Routine
For most investors, you only need to check your stock portfolio once every few weeks to keep everything under control. There is such a thing as overmonitoring your stock portfolio and this can cause you to act emotionally and make bad decisions.
Daily stock portfolio maintenance is required for day traders or scalpers who enter and exit positions quickly. Every day, there are a few high flying stocks that move up quickly especially penny stocks.
Build a daily routine if you plan to day trade and make some extra income from the stock market
Check your portfolio twice per week typically on Monday and Friday to see how the overall market is performing. You could make your trades on Monday then check your portfolio on Friday to see how you did.
If you are a swing trader then weekly check-ins is a very solid strategy. Give your positions time to rise in value before you consider selling.
This is the best strategy for long term investors who own high quality growth stocks and/or dividend stocks. Check your stock portfolio 1 time per month to see how everything is doing. If you don’t like a stock anymore then sell it and move the funds into another position.
If you are investing in stocks for the long run then you don’t want to check too often because you can mess up a lot of your previous investments by overthinking things and overtrading.
What Happens If You Don’t Check Your Stock Portfolio?
Most brokers will keep your stocks safe even if you don’t check your stock portfolio for a while. Setup automatic DRIP to reinvest your dividends or else they will be paid in cash and deposited into your core money market account.
If you don’t check your stock portfolio then you may discover some of your stocks have risen or fallen by a significant amount.
I don’t recommend this strategy because you don’t want to hold losing stocks forever if they have zero chance of recovering.
If you don’t want to check your stock portfolio then invest in ETFs and save yourself the headache.
Sometimes Inactivity Beats Activity
A study by Fidelity found out that the best performing portfolios belonged to investors who forgot about their account or died.
Inactivity is sometimes the best strategy for a portfolio because you give your stocks time to increase in value. Remember: the stock market doesn’t move as fast as cryptocurrencies. It takes time for businesses to grow and generate earnings.
Stay on Top of Important Dates and Earnings Season
Unless a particular company announces a new product or service, most stocks will trade alongside the overall market. That’s why it’s important to look out for key dates such as CPI inflation data releases, Fed meetings, etc.
Every quarter, publicly traded companies must report quarterly earnings to shareholders and that’s when some stocks in your portfolio will rise or fall depending on the earnings sentiment.
It’s a good idea to check your portfolio around these key dates to limit downside risk in case some of your stocks crash in value.