How frequently should you monitor your investment?

You decided to invest. Mapped out your goals and developed an investment strategy to help realise those goals. Setting your investment plan into motion can be exciting and you might find yourself eagerly, even impatiently, waiting to see it come to fruition. But as the old saying goes, “a watched pot never boils”.

When checking your investment performance too often, time may seem to move slowly, since you’re focusing on it and waiting for something to occur.

While it’s easy to get instant updates on how your investments are performing through online platforms, ask yourself: how does this help you? 

Keep in mind that markets are volatile, but it’s not your portfolio. You haven’t actually locked in any performance (gains or losses) until you sell your investment, but many novice investors react emotionally to bad news in the market.

If you have a well-considered financial plan and a diversified investment portfolio, you don’t have to check in on your investments every day. You’ll be working towards a long-term time horizon, where a single day’s dip in a 10-year journey is highly unlikely to make any difference at all.

So, if not daily, how often should you check in on your investments? This largely depends on your individual circumstances, but it’s likely that your financial adviser will tell you to check in once a quarter. Review your quarterly statements to see if there have been any significant moves in the market and look for opportunities… dips in performance often allow you to pick up quality investments relatively cheaply. For most investors, their fund managers will identify those opportunities and switch into and out of different assets as market conditions change. So, an annual sit-down with your financial adviser should be just right.

But what if you don’t have a financial adviser? While we are big advocates of the benefits of sound, independent advice, we realise that some investors prefer to navigate the investment landscape themselves. While this may seem like a lonely road, fortunately it needn’t be. Most investment managers such as M&G Investments have really useful websites that are packed with investment tools and insights, as well as having industry professionals on hand to assist you with your unit-trust-related questions. So, if you do decide to go it alone… know that help (but not advice) isn’t far away.    

When you do decide to check in on your investments, be sure to know what you’re checking for. Sometimes, market movements can cause certain asset classes to grow faster than others, which means that your asset allocation may need to be rebalanced to bring it back to within its target range. Another thing to look out for is whether you’re still on track to meet your long-term investment goals, especially if your goals change along the way. If the growth of your investment hasn’t quite met your expectations, ask your financial adviser about the reasons behind that performance. There’s usually a good explanation behind short-term underperformance; the trick is not to panic and to remember that performance doesn’t come in a straight line. When investing over the long term, ups and downs can (and should) be expected. 

If you aren’t already investing with us, click here to start investing online. Alternatively, contact your financial adviser or our Client Services Team on 0860 105 775 or email us at info@mandg.co.za