How Often Should I Look?

photo of boy peeking on brown wooden fence
It’s a lot more fun to peek through holes at this age . . . 
The 24-hour news cycle, compounded by social media, can be intimidating and draining. Short of entirely pulling the plug, it is incredibly difficult to avoid being bombarded by news. The headlines are designed to get you to click, and it can be hard to avoid getting engrossed in an article or opinion, whether or not you agree with it, disagree with it . . . or vehemently desire to argue with whomever is commenting on the article.
Mobile push notifications make this even worse. For example, I have notifications back in February from my CNBC application that say the following, one after the other, all in caps.
Now, as this was happening, do you think I felt particularly good about what was going on? No, not at all. Even as a professional in investment management, a space where marketing volatility can (and invariably will) occur at times, it doesn’t feel good to see that. I know what that means that day for client accounts, and I imagine what they might be thinking or feeling if they are getting the same text notifications I am.
What you have to recognize though is that these headlines and articles are designed to create a reaction of some kind, and with that comes a risk. The risk is that no matter how deliberate and contemplative we can behave when emotions are calm, we have the potential to act irrationally, to make emotional decisions and actions that throw that logic entirely out the window when our emotions are not calm. Knowing that these notifications and tweets and news and fake news are designed to arouse emotion, having a process for how you process information becomes really important, because your financial health counts on it.
So the big question I get asked is: How often should I look?
The short answer: Only as often as you can without immediately acting on it.
Longer answer: I think a good way to gauge how often you should evaluate your finances depends on the immediacy of their impact. For example, looking day to day at your mutual funds and stocks that you are holding as a long-term investment, while entertaining on a certain level, doesn’t provide a ton of context for how the fund or company are actually performing. Companies typically report earnings and performance on a quarterly basis, and in many cases offer a narrative of what is transpiring in the business. For many clients, a small quarterly update with more comprehensive review on a semi-annual basis makes sense, with some clients preferring just the semi-annual comprehensive review.
For your daily spending and monthly cash-flow, reviewing more frequently makes sense. Reviewing your spending and saving on a weekly or bi-weekly basis provides several benefits. First, it allows you to assess your buying habits at a time where you still remember what you spent money on and why. If an unusual spending pattern comes up, reviewing regularly will reveal the pattern and can make you aware of emotions you haven’t really thought about in the moment, like eating out for lunch more often because work is really stressful. Second, it helps to make sure that someone else is not fraudulently using your account. As much as card companies proactively try to identify weird spending situations with algorithms, you are still your best line of defense for both identifying and shutting down account fraud.
Just like how what you eat influences your body’s performance, what you digest in terms of information influences how you think, feel, and make decisions. If you eat cookies and drink soda often, you can expect to be overweight and have a low level of energy and performance. If you eat a balanced diet with lots of nutrients, you can expect your body to feel better for it. The same goes for the information you take in, and I think this is where working with a fiduciary financial adviser makes so much sense. That adviser’s job is to keep you informed, asking questions and providing a balanced diet of information, so you can make decisions to improve your financial health.
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