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Is there such a thing as keeping too close of a watch on your portfolio? Perhaps, especially if you find yourself checking on investments daily, or even multiple times a day. Read the article from Entrepreneur below.READ THE ARTICLE
Zoom out: Long-term growth is difficult to see when you’re up close, searching for gains regularly. This behavior can lead to various negative effects, which can then result in significant threats to your lifelong savings. Here are a few reasons why:
📌It tempts you to react to market fluctuations – Seeing the market fluctuate right in front of you can cause you to overthink, make snap decisions and overlook long-term gains
📌You might put your overall strategy at risk – Your retirement plan is a financial framework that is customized to you, but seeing volatile market activity on a down day could lure you to derail from that guide
📌You might feel frustrated by the slow crawl – It can be discouraging to see only small market moves each day, so instead, check on your overall growth alongside your financial advisor every six months or so
📌It’s psychology: You feel the pain of losing money more than earning it – This is otherwise known as “loss aversion,” and it’s a financial bias that can easily sway your investment decisions
📌Technology makes it easy to see whether you’re on the right track – Today’s technological algorithms can easily confirm you’re where you should be, and, better yet – your advisor can too
📌It might encourage you to trade – The urge to pursue the hottest investment of the day could cost you money in capital gains and trade commissions
Gender makes a difference: One of our past Retire With Purpose podcast guests, Meredith Jones, shared that one of the top reasons women earn better average returns than men as a whole is that they know how to “set it and forget it.” Men tend to want to poke and prod the portfolio to see how they can make it better, typically realizing it’s a losing battle in the end.