How to Conduct a Investment Portfolio Check-up

FUTURE PROOF: Too-frequent portfolio monitoring can lead investors to tinker with their portfolios' unnecessarily, but when you do review your holdings follow these rules

Christine Benz 11 June, 2015 | 4:54PM
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When it comes to checking up on your portfolio, a policy of benign neglect is invariably better than too much monitoring. Investors who pay attention to their portfolios' daily fluctuations may become self-flagellating during the market's periodic downturns or congratulating themselves too much when their balances are up.

Worse, too-frequent portfolio monitoring can lead investors to tinker with their portfolios' positioning and holdings more than is desirable or necessary. They might be inclined to adjust their stock/bond/cash mixes based on short-term macroeconomic events, for example, or cash in a fund after a short period of underperformance. Taking a long view is much more helpful. For most investors, a quarterly, semi-annual, or even annual portfolio check-up is sufficient.

With that in mind, here are four additional mistakes – in addition to checking up too frequently – to avoid.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Christine Benz

Christine Benz  is director of personal finance at Morningstar and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances.