Vigilance Can Sometimes Work Against You

When you invest in mutual funds with diversified portfolios, timing the markets can be even tougher.

Vigilance Can Sometimes Work Against You

Few people can accurately time the market; buying at the lowest point and selling at the highest point is nearly impossible on a long-term basis. When you invest in mutual funds with diversified portfolios, timing the markets can be even tougher. Tracking the prices of your mutual funds (or other investments) on a daily basis is time-consuming and can also cause you to lose sight of your long-term goals. Checking your investments on a weekly or even monthly basis might make better sense – that way you won't be as likely to give in to emotional trading or to panic during short-term dips in fund performance.

Consider buying or selling your investments when they no longer meet the criteria you have established; if an investment performs poorly for a long period of time, or if a fundamental change in the economy takes place, then buying and selling could be a good option. Just don't look at your investments too closely or too frequently; your goal is to grow wealth over the long term.