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How Often Do You Need to Review Your Brokerage Account Balance? – The Motley Fool

Image source: Getty Images

It’s a good idea to strike a balance.


Image source: Getty Images

It’s a good idea to strike a balance.

Key points

  • It’s important to keep tabs on your brokerage account to see how your investments are performing.
  • But you also don’t want to check up on your investments too frequently.

If you have money you may need within the next few years, such as funds you’re accumulating to put a down payment on a home, then that cash should stay in the bank. But if you have some money you don’t expect to need for five years or more, then investing it could be a smart bet. That way, you’ll have an opportunity to grow that money into a larger sum (though to be clear, that’s not guaranteed to happen).

If you have money in a brokerage account, you may be inclined to take a peek at your portfolio every so often and see how it’s doing. In fact, you should keep solid tabs on your investments to make sure they’re performing as you expect them to, and that your portfolio is well diversified.

But there is such a thing as checking your brokerage account too often. And if you fall into that trap, it could lead to unnecessary stress and rash decisions that don’t end up serving you well.

How much is too much?

It’s a good idea to check your brokerage account every quarter to see what your portfolio looks like. Specifically, you’ll want to make sure each investment you hold is generally performing the way you expect it to, or is performing in line with the broad market.

You may own several stocks that are down when you do a portfolio checkup. But if the broad market is down at the time, then that’s not something to panic over. On the other hand, if you own 14 stocks and 13 are up while one is down substantially, that outlier is something you’ll want to look into.

The other reason you should check your portfolio every quarter is to make sure it’s as balanced as you want it to be. As investments gain and lose value, you can run into a situation where you’re no longer as diversified as expected.

Imagine you build a portfolio where 20% consists of tech stocks and your remaining assets are spread out across different market segments. If your tech stocks gain enough value while your other stocks grow at a much slower rate, you may find …….


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