How Often Should You Look at Your Investments? Ep #238

How often should you look at your investments? Some of my clients look at their investments every day. Some look weekly, monthly, quarterly, annually—and some never look at them. So what is my answer? It depends. After listening to this episode of Best in Wealth, you will know how often you should check on your investments (based on you).

Outline of This Episode

• [2:18] Whole30: The importance of consistency and discipline
• [6:51] The third-best tennis player in the world
• [9:52] The track record of the S&P 500
• [17:51] What looking at the S&P 500 tells us
• [20:55] How many times should you look at your portfolio?

The third-best tennis player in the world

Let’s talk about tennis for a minute. Roger Federer was one of the top three tennis players of all time. He is elite. Of the millions of tennis players who grew up playing, got scholarships, and played the best they possibly could at the pro level, Roger was one of the best.

• Roger won 20 Grand Slam Men’s Single titles, the 3rd most of all time.
• He is the only player to win five consecutive US Open titles.
• He won 40 consecutive matches at the US Open.
• He is the second male player to reach the French Open and Wimbledon finals in the same year for four consecutive years.
• He is the only male player to appear in at least one Grand Slam Semi-Final for 18 consecutive years.
• He won eight Wimbledon titles.

He is one of the best to ever play the game. But what does any of this have to do with investing?

The track record of the S&P 500

Let’s switch gears and talk about the S&P 500 (which you can not invest in but it is a benchmark). The S&P 500 has had an amazing track record. The average return is a little over 10% per year. But what does that mean? What does a 10% return look like?

Let’s compare the S&P 500 to a high-yield savings account. A 10% return means that every seven years, your money will double. If you have $1 million in investments—and actually earn 10%—it will be $2 million in seven years.

The rule of 72 says that if you divide 72 by your interest rate, that is the number of years it will take to double. So if you put your money in a high-yield savings account—likely earning around 4.5% right now—it will take 16 years to double. That is why we need to invest in some things that will grow faster—even faster than a high-yield savings account.

What does any of this have to do with Roger? In tennis, each time someone serves the ball, you are playing for a point. When you get enough points, you win the set. When you win enough sets, you win the match.

He is one of the best players ever—but he only won a point 54% of the time. Roger won 75% of his sets. And Roger won 81% of his matches. You are probably thinking, “Scott—how does this have anything to do with how often you should look at your investments?” Stick with me.

What looking at the S&P 500 tells us

The S&P 500 plays a game every time the stock market is open. How often is the S&P 500 positive or negative? Let’s call a positive result a “win” and a negative return a “loss.” The S&P 500 is positive 53% of the time and negative 47% of the time.

If you look at your statements quarterly—like Roger playing a set—the S&P 500 is positive 71% of the time (going back to the 1930s). What about annually? If you look at your statements annually, the S&P 500 is up 78% of the time annually. 8 out of 10 times, you are positive. That is why you typically see a 10% return on the S&P 500.

When you look at your statement every day, you will be disappointed half the time. If you look at your statement quarterly, you are only disappointed 29% of the time. If you look at your statement every year, you will only be disappointed 22% of the time. Which sounds better to you?

When your portfolio is not doing well, it feels twice as bad as when it is doing well. Too much anxiety leads to a desire for change. When you make too many changes, you disrupt everything.

What’s the best choice for you? Listen to the whole episode so I can help you make the most informed decision for you.

Resources Mentioned

• The Center for Research in Security Prices
• Roger Federer

Connect With Scott Wellens

• Schedule a discovery call with Scott
• Send a message to Scott
• Visit Fortress Planning Group
• Connect with Scott on LinkedIn
• Follow Scott on Twitter
• Fortress Planning Group on Facebook

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Podcast Disclaimer:

The Best In Wealth Podcast is hosted by Scott Wellens. Scott Wellens is the principal at Fortress Planning Group. Fortress Planning Group is a registered investment advisory firm regulated by the Securities Act of Wisconsin in accordance and compliance with securities laws and regulations. Fortress Planning Group does not render or offer to render personalized investment or tax advice through the Best In Wealth Podcast. The information provided is for informational purposes only and does not constitute financial, tax, investment or legal advice.

About the author, Scott Wellens

Scott Wellens, CFP® is an investment advisor and founder of Fortress Planning Group. After earning his Bachelor of Science degree from the University of Wisconsin-Oshkosh, Scott quickly ascended to become a Vice President of North American Sales at a major regional provider of telecommunications infrastructure. While financially successful in this role, Scott searched for ways to pursue his passion related to financial literacy and providing financial freedom for both his own family and others. During his search, Scott became curious about the significant gap he found in the financial services sector: he was unable to find a comprehensive financial planner that maintained a family stewardship lens without being attached to financial products. Scott decided to fill that gap by creating his own planning firm that maintains a strong passion for comprehensive, unbiased wealth planning that is genuinely client-centered.

Scott resides in Menomonee Falls, WI with his family. He is the father of three active and independent daughters who keep him on his toes. Scott is an active community member, serving on the Hamilton Education Foundation Board, serves as a Dave Ramsey Financial Peace facilitator and leads the All Pro Dad’s group at their local elementary school. Scott enjoys spending his free time visiting state parks with his family, reading, and watching the Milwaukee Bucks and the Green Bay Packers win ball games.

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