Quick: How are your investments doing? If you're stumped, read on.
Most people in the U.S. know how their local sports teams rank. We know what film won the last Academy Award. We know the latest about Kobe Bryant, and we know that Michael Jackson lives in the aptly named "Neverland." We live in a society that pays a lot of attention to some pretty weird stuff, but one thing we don't seem to pay much attention to is how our investments are doing compared with the market's averages.
Most important of all to the long-term success of your investment portfolio is paying attention. Would you buy a plant and never water it? Would you buy a dog and let him eat the curtains after you've explicitly and patiently "explained" the reasons he shouldn't? Of course not.
The same is true, to a lesser degree, for a portfolio of investments. Unless they are government bonds, any investment needs to be checked up on regularly to see whether it is matching or beating the market and other substantially similar alternatives.
Reviewing your investments, particularly when you may have made mistakes, offers a crucial opportunity to learn from your missteps rather than being doomed to repeat them. Everyone makes errors on occasion, but most successful investors avoid making the same goofs more than once.
Set aside time to review your portfolio at least once every three months, if not weekly. While you shouldn't be glued to the computer screen tracking your investments on a minute-by-minute basis, tossing quarterly reports in a drawer and forgetting about them is not a great idea either.
If you're not going to take the time to measure your results (and, hey, we understand that not everyone gets a kick out of this stuff), consider investing in an index mutual fund. Here's a how-to guide that'll walk you through the process in just 60 seconds. Remember, indexing may seem "simple" in the world of investing, but it's still putting your money in the stock market. So only commit those dollars you're willing to keep invested for at least the next five years -- and hopefully longer.