How Often Should I Check My Stocks? | What Is the 3-Day Rule in Stocks?

November 25, 2021 | Editorial Team

You are probably asking yourself “how often should I check my stocks?” It peeves to see new investors continuously monitoring their stocks daily. It appears that even the tiniest drop in the stock market drives them to panic and sell everything at once, which is not a good idea. The answer depends on your risk tolerance as well as your time constraints.

The first thing you want to do when you invest is to figure out what kind of investor you are. Are you an aggressive or conservative investor? Those willing to take the risk will need to monitor their investment portfolio more frequently than those afraid of losing all their money.

a woman with tablet and stock charts

How Often Should I Check My Stocks – Should I Check Every Day?

You should stop checking your stocks often as it is a recipe for poor investment strategy and anxiety attacks. But this doesn’t mean you shouldn’t be aware of the performance of your investments. If you have an extensive investment portfolio, you may want to consider investing in mutual funds instead of individual stocks (see nickel stocks) so you can avoid having to pay attention to each stock.

It is important to note that it is best to start small (see small-cap stocks) and work your way up if you are not familiar with the stock market. This means that you should only buy one share of a company at a time until you feel comfortable enough to purchase additional shares. Once you get used to the process, you can increase your stock holdings and buy multiple shares of companies.

What Is the 3-Day Rule in Stocks?

If you are looking forward to buying underlying stocks because their share price has substantially dropped, you might want to look into the three-day rule. This rule states that investors should wait three days before making any stock purchases without the investor violating the three-day rule. The drop in stock share price entices the investors to buy stocks at a lower price (at a discount).

The unexpected fall in stock prices brings about margin calls in the accounts that used leverage or options to enter into contracts to buy stock. These margin calls may result in additional stock sales the following day, driving the price even lower.

That is why institutions never dispose of their shares on one occasion. But, they spread their stock sales out over two to three days. Suppose they sell their shares at high volumes once there is a stock market crash. Instead, they will maximize the selling price when they make the sale over the next 3 days.

How Does the 3-Day Rule Benefit You? 

When you follow the 3-day rule, you give yourself plenty of time researching and analyzing the company and its products and reading the stock market reports. This allows you to gain knowledge about why the company and its products had a sharp drop so that you can decide whether or not you would like to invest in it. Also, when it comes to financial services for investment, asking robo advisors for professional assistance has become increasingly popular.

You won’t lose money by following the 3-day rule as your profits will grow faster and minimize your losses. With the 3-day rules, you don’t have to worry about buying stocks at a loss. This is especially true if you are purchasing stocks from a broker.

a man showing reaction while watching the screen

How Often Should You Check Your Investment Portfolio?

There are a few things to keep in mind during investing; it’s essential to keep a close check on your holdings. It is an excellent strategy to know how your portfolio is performing, which allows you to change your approach to maximize your earnings. How often, though, should you monitor your investments and log into your dashboard?

The answer depends on how much you’re planning to invest. If you’re starting, you might want to check your portfolio once per month. As your account grows, you will probably want to check it more often. Some investors even go as far as checking their portfolios daily. It depends on your goals and tolerance for risk – for a less risky investment guide check out day trading in Canada.

How Often Should You Check Your Stocks?

If you are going to hold onto your investments for the long term because you see something that looks promising, it is best to let them run their course without constant intervention. This allows you to focus on making money rather than worrying about whether your stocks are up or down.

You will stress yourself if you keep examining your strategy because you’ll certainly see changes in value from one day to the next (see also day trading). Instead of gaining perspective and rationalizing, you might become agitated and make hasty judgments that may jeopardize your financial prospects.

Markets are like roller coasters in that they go through extreme changes in the shortest term (look at swing trading for profits from changing trends). If you’re investing for the long haul, you’ll have to learn to deal with the ups and downs. You should remember the goals you set, ignore the noise, and limit how often you check your investment portfolio. These are fantastic ways to help you stop worrying about market fluctuations.

a man typing on tablet at his desk

How Long Do You Have to Keep Stocks?

There is no specific amount of time that you need to keep your stocks. However, there are some key takeaways that you should consider before deciding what length of time you plan to keep your stocks. You should always check the performance of your investment over a certain period. If your portfolio hasn’t shown any growth, you might want to reconsider holding onto your stocks for longer periods. The reason behind this is that you don’t want to miss out on potential gains.

In the real world, every stock takes off like a rocket ship and returns large high-end profits. However, this isn’t usually how the stock market works out for investors. Some stocks have the potential to increase in value. Others may suffer financial losses. Also, the value of the best stocks, frequently called ‘blue chip‘ stocks, will remain stable. Predicting the stock market behavior is quite challenging.

Due to market uncertainties, it is always tougher for investors to know when to buy, hold, or sell stocks. Consider the following factors when determining whether to hold or sell stocks:

  • Reacting to the performance of the recent investments in the stock market. If you sell because of a sudden drop in share price, it could jeopardize your investing strategy. It could be more helpful if the investor holds onto the stock until the short-term dip in the market is over.
  • Buy and hold onto the stock for the long game. This helps you to reduce the risk of short-term volatility by spending ample time in the market
  • Hold onto stocks as they might be profitable in the future. When they hit the profit requirement, then you can sell them once. You can sell your stocks to diversify your assets (see also total liquid assets) to balance goals and risk tolerance or maybe due to personal reasons due to the market’s ups and downs.
woman at work and stock graph

How Can I Avoid Checking My Portfolio Too Frequently?

The following are tips to help you as an investor improve on your habits when checking on the performance of your investments:

Think of Long-Term Investment Goals

You should look at the big picture by focusing on a long-term investment portfolio to achieve greater returns (see long and short sales positions explained). Set realistic expectations that your investments will or won’t always perform well. It is normal to see some losses in your investments.

Come up With a Plan

You should develop a plan to avoid constantly checking on your portfolio. You should set aside specific times during the week or once a month to check your portfolio. Be patient when waiting for your investments to grow. In addition, for stocks with strong fundamentals and solid growth prospects see our penny stocks review.

Don’t Worry About Missing Anything.

You don’t need to monitor everything about your portfolio. Instead, focus on making sure you understand the basics, such as the current value of your portfolio, top stock picks for investors to purchase, the total number of shares you own, and the total amount of money you started investing with. Keep your emotions out of it and stay positive.

arrows showing the way to Buy, Hold and Sell directions

The Bottom Line

Investing in stock is a very rewarding activity if done right. There are many things that you can do to make sure your investments work for you. By sticking to these simple rules, you should enjoy all the benefits of investing without having to worry about whether your investment portfolio is performing well.