These days, it’s easier than ever to track your investments. There are apps for just about every brokerage firm on the market, and even traditional bricks-and-mortar firms have answered their clients’ call for 24/7 online account access.
That kind of constant access could set you up for one of the many pitfalls of today’s modern investors –– too much tinkering.
Just because you have the ability to adjust your portfolio with every glitch in the market or news headline that pops up on Twitter doesn’t you should. Chances are you could be doing more harm than good by aligning your investment habits to the ebb and flow of the market and a media that tracks it like rabid wolves –– not to mention the fact that you’ll drive yourself nuts.
The key is striking a balance. On one hand, you don’t want ot leave your portfolio to the weeds. On the other, you also don’t want to be a helicopter investor.
Here a few rules Dan Caplinger of the Motley Fool suggests considering:
Simplify your strategy. Caplinger: “The simpler your investing strategy is, the less often you’ll need to watch how it’s working. More complicated strategies often don’t work if you don’t keep a careful eye on market conditions, so if you use them, you’ll need to take more advantage of your ability to stay connected to what’s happening with your assets.”
Track your account less if you’re prone to being emotional. Caplinger: “The more prone you are to respond emotionally when something goes wrong with your investments, the less you should look. Anger leads to irrational action, and acting when you should sit tight is one of the biggest mistakes investors make.”
Don’t blindly assume your advisor has it handled. Caplinger: “Advisors won’t necessarily contact you as often as you’d like, and they may not pay attention to the things that are most important to you. Keeping abreast of your own finances is crucial even if you’ve hired people to help you.”
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