People who hover over their investments like a mother hen, worried about her chicks are “helicopter investor. The term was developed to describe people who spend way too much time obsessing over their investments and checking on them. You’ll know if you fit the criteria instinctively, but if you’re still wondering, here are the habits of helicopter investors.
Once you’ve developed an investment portfolio, it’s a good practice to be aware of how your investments are doing, but it’s not something that you should obsess over. If you find yourself checking in every day, in fact, several times a day, even when things are going well with your investments, you’re taking it over the top. If you receive regular alerts on your phone or computer, inundate your life with special financial news reports or subscribe to multiple financial publications, you are a helicopter investor.
Hazards of hovering
The reality of investing is that stocks go up and down. They have their good days and their bad ones, but this is the nature of the market and it’s not generally anything that you need to be concerned about if your portfolio is strong and performing well overall. The greatest danger in hovering is that you may be tempted to make adjustments that can cost you in the long run. Just ride it out unless there is a legitimate reason to be concerned.
How to avoid being a helicopter investor
Once your portfolio is established and things are going well, avoid the temptation to tamper with your investments one way or the other. So a stock may have had a bad day or two. If you hadn’t been on hyper-alert in the first place, you probably wouldn’t have even known about it.
Set limits on the time you spend checking your investments
Most people allow weeks or even months to pass before checking their investments. If you’re doing it once a week, we suggest that you cut back to only checking once per week. You don’t need to know every detail and you can catch up on the latest trends for your investment in a few moments.
Don’t be alarmed by fluctuations
Stocks go up and down. If you monitor them too often, you’ll be happy one moment and upset the next. There is no good reason for jumping on this emotional roller coaster. Let your investments do their thing and relax about it. You’ll probably live a longer and happier life if you take this advice.
Avoid emotional responses
Many people who have fallen into the habit of hovering make quick decisions about their investments based on how they are feeling at the moment. Buying or selling stocks on an emotional whim is a poor practice that can be damaging for your financial health.
Stay informed but don’t overdo it
It’s wise to keep up on market trends and watching a few programs or reading an occasional publication is a good thing. It’s when you’re dedicating hours of time doing this that you’re entering into the red zone. You shouldn’t necessarily react to every stock tip that you hear. Keep up to date on the trends, then give your mind a break from it. Moderation is the key.
There are multiple good resources for staying up to date on the market trends on the internet. It’s fine to use the free services versus a paid subscription, but don’t spend too much time doing it. Spend as much time as you would reading a good magazine, then leave the site and don’t waste your entire day getting worked up over the new information that is changing sometimes hourly. You could drive yourself crazy and spend hours a day researching market trends so do yourself a favor and restrict the amount of time you spend doing this.
Turn off phone notifications
If you have market alerts coming to your phone, you’re getting in way too deep. As painful as it might be, turn off all phone notifications and alerts. As stated previously, the market is going to move upwards and downwards and you don’t need a reminder that this natural process is taking place. It may make you want to check on your investments more often than you should. These are the things that you can do to prevent yourself from becoming a helicopter investor.