I was talking to my wife the other day about our investments. Our overall holdings are what would be termed a moderate asset allocation of stocks and bonds using low-cost index mutual funds and ETFs. Somehow it came to light that she had a little over $10,000 in cash sitting in her Roth IRA. I think these were the last two year’s contributions that she just never got around to investing.
Because my wife is younger than me, her retirement accounts will not be available to us without penalty when we actually retire. Because of this, I have recommended that she invest all of her Roth IRA funds in the total stock market as soon as new funds are added.
I tend to look at our joint and my retirement accounts about once a week. That is probably too often, but as long as I do no more than look, it doesn’t hurt anything. My wife apparently doesn’t much look at her accounts.
Many studies say that looking at retirement accounts too often can be detrimental because you will tend to want to do something as the market swings up or down. They say that men are “more prideful and overconfident, tend to take too much risk, and they over-trade.” Women are better able to control their emotions, look for less risk, and thus often have better returns. Talking about emotional investing, John Bogle of Vanguard fame often says, “Don’t do something, just stand there.”
On the other hand, I am concerned that my wife doesn’t look at her investments often enough. She missed earning $2,500 over the last two years. Of course she was not happy when I pointed that out.
I would say that everyone should look at their retirement accounts at least once a year, and rebalance their asset allocation if necessary. You may want to look more often, such as once a month, to make sure new funds are going into the asset class that has gone out of balance. This will help to rebalance your asset allocation using new savings with no need to sell and buy from one asset class to another.