One in seven nervous investors check holdings every day

Men check more than women, and younger investors more than older ones.

One in seven investors (15%) are so nervous about their money during the pandemic that they check their holdings at least once a day.

That is according to research by behavioural finance experts Oxford Risk into 1,008 investors. It found that 4% check their investments several times a day.

Meanwhile, 24% check the information sources they use to make investment decisions at least once a day. These include financial press, financial advisers, social media, colleagues and family.

Men are more obsessive about their investments, with 23% checking them each day versus just 7% of women.

Younger investors also check more frequently, with 22% of 18 to 34-year-olds checking at least daily, versus just 13% of those aged 55 and over.

The research also found that 37% of adults will pay more attention to their investments this year, compared to 26% who don’t expect to.

The most common reason cited among those planning to pay more attention is greater volatility in markets (56%).

Around 40% say it is because they are more anxious about their financial situation, and 27% point to the higher volume of news and ‘noise’ being generated about stock markets.

Some 18% say this is because they have more time on their hands because of changes to personal circumstances.

• Mind & Money: understanding ourselves and our attitudes to risk
• Top 10 most-popular investment funds: February 2021
• Top of the markets: energy and financials the winners in February

Oxford Risk’s research also found that 21% of retail investors think the value of their investments has fallen during the Covid-19 crisis, compared to 16% who believe these have increased, and 48% who think there has been little or no change.

Greg Davies, head of behavioural finance at Oxford Risk, says: “Giving investments too much attention often leads to high levels of anxiety among investors whose emotions will be affected by market fluctuations. This can lead to overly frequent and misguided investment changes and divestments, with all the costs those incur.

“Investors should ideally review their investments once a year, in the context of their long-term financial picture, to ensure they are on track to meet their long-term goals and that they are still comfortable with the risks they are taking.”

Oxford Risk says many investors have taken more money out of investments and put it into cash during volatile times for markets.

But many will fail to reinvest this cash for long periods, and the long-term cost of this ‘reluctance’ to invest is around 4% to 5% a year over the long term.

• Find out more about behavioural finance here
• Take control of your retirement planning with our award-winning, low-cost Self-Invested Personal Pension (SIPP)

Becky O’Connor, head of pensions and savings at interactive investor, says: “Like obsessive calorie counting, regularly checking your investments will sap the joy out of investing, inducing anxiety and putting you at risk of making knee-jerk decisions on the back of short-term market movements.

“The value of investments can rise and fall significantly in just a short space of time. Looking at performance graphs that span just a few days can mislead you into thinking something has fallen or risen a lot, when in fact over the course of five or more years, the movements look far less dramatic.”