How Often Do You Need to Review Your Brokerage Account Balance?

It's a good idea to strike a balance.

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 that at some point, those tech stocks make up 60% of your portfolio, not 20%. But that's not necessarily ideal, because if the tech sector then crashes, you could be looking at bigger losses. In that situation, you'd likely want to shift some assets around for a more even balance.

While it's a good idea to check your brokerage account once a quarter, checking it once a day, or even once a week, is probably overkill. The stock market can swing wildly from one day to the next, and if you check your portfolio too often, you could subject yourself to needless stress when you see your investments' value plummet overnight.

In fact, checking your portfolio too frequently could lead you to make rash decisions, like selling off stocks when they're down rather than waiting for them to recover their value and avoiding losses altogether. For that reason, a quarterly checkup is more appropriate.

Don't torture yourself

Checking your brokerage account too often could lead to a lot of sleepless nights. Imagine there's a week or two when stock values consistently drop. If you check your portfolio every day during that time, you might get anxious. But if you check your portfolio six weeks later during your quarterly review, by then, your brokerage account balance may have already recovered all of its value from that blip.

That's why a daily or even weekly review of your portfolio is not recommended. If you don't want to wait three months to check on your investments, do a monthly review. And if there's a specific stock or investment you're looking to buy, you can always peek into your portfolio to see where it might fit in. But as a general rule, it's good to limit the extent to which you check your portfolio -- for the sake of your mental wellbeing.