Why checking your portfolio too often is bad for your returns

6 minute read

Technological advancements have done much to improve the world of investing, with digital services such as client portals and mobile apps providing investors greater accessibility for monitoring their portfolios - but they can also lead to behaviour which could cause less obvious investment outcomes, and not always for the better.

To be clear, checking a portfolio will obviously have no impact in itself on returns, but if you check it too often your perception of performance may be different to reality, which could lead to poor investment decisions.

This is because, on any given day, the market may be up or down (53.7% probability of positive return for the MSCI All Country World Index total return over the past 25 years, as you can see from the chart). But over a 5-year time frame you have had a 100% probability of the markets being up.

Graph showing the proportion of rolling periods with positive total return since 2000

Source: LSEG Datastream, Quilter Cheviot Limited. 31/07/2025.

These figures refer to the past and past performance is not a reliable indicator of future results.

This is because in the short-term market movements are subject to large amounts of “noise” and can be harder to predict. Put another way, there is far more randomness in returns over shorter time periods. However, over longer time periods, the drivers of equity market growth compound to provide stronger returns.

Therefore, as we extend the timeframe, the better the chance of a positive return. The market was up on 53.7% of days, 57.3% of weeks, 62.1% of months and 78.7% of years since 2000. And the chances of a positive return keep on increasing the longer the timeframe. 89.7% of the time an investor would have made a positive return over a three-year period. For a five-year timeframe or higher, nearly all periods produced a positive return. The MSCI All Country World Index provided a total return of 526% from the start of 2001 up until 31 July 2025. £100 invested would have returned £626.

Meanwhile, the greater chance of a loss over a shorter timeframe increases the susceptibility to succumbing to behavioural biases such as loss aversion and reference dependence. Research has shown that a loss causes a greater psychological pain than an equivalent gain causes joy. Losing £100 feels more painful than the joy of gaining £100. If on a daily basis the probability of a loss or gain from the stock market is pretty much the same, then checking returns on a daily basis will bring more pain than joy!

Checking portfolios too often can also cause reference dependence issues. People tend to evaluate outcomes relative to a reference point, rather than in absolute terms. While this is logical in itself, it can mean that investors evaluate returns compared to the last time they checked a portfolio. Therefore, there is a greater chance that the value is lower than previously if checked daily instead of monthly or quarterly. This can lead to an action bias, creating an impulse to act even if that is not in the best long-term interests.

In summary, checking a portfolio too often can increase the chances of having an urge to act on short-term emotions, rather than long-term fundamentals. Losing sight of the wood for the trees can seriously damage long-term returns. Having said that, we encourage clients to keep a watchful eye on their portfolios via periodic reviews and consultations with their Investment Manager.

We firmly believe that the enhanced accessibility from our client portal and mobile app are positive developments if used correctly. We are keen for as many clients as possible to enjoy the benefits of the portal, including going paperless if they so wish, so please do consider trying the portal, if you have not already. You can do so by scanning the QR code below. For the mobile app, simply log in using your My Quilter Cheviot account credentials. If you are not already registered for the portal, please contact your investment management team.