The stock market goes down on roughly 47% of all trading days. If you check your portfolio every day, you will see a loss almost half the time. Your brain — designed by evolution to treat frequent losses as existential threats — will make terrible decisions as a result. Here's the science behind why, and what I do instead.
There's a story that gets told in behavioural finance circles. Fidelity Investments once analysed their client accounts to find out which investors had performed best over the long term. What they found became legendary: the top-performing accounts belonged to people who were dead. The second-best belonged to people who had forgotten they had accounts.
It's probably apocryphal — Fidelity has never officially confirmed it — but the principle behind it is one of the most robust findings in all of behavioural economics. The less you look, the better you do. And a Nobel Prize was essentially won proving why.
The Nobel Prize-winning idea that explains your checking addiction
In 1997, two behavioural economists — Shlomo Benartzi and Richard Thaler (who would later win the Nobel Prize) — published a paper that changed how we think about investor behaviour. They called the phenomenon myopic loss aversion.
The idea combines two well-established psychological biases:
The two ingredients of myopic loss aversion
- Loss aversion. Daniel Kahneman and Amos Tversky showed that losses hurt roughly twice as much as equivalent gains feel good. Losing £100 generates roughly the same emotional intensity as gaining £200. This asymmetry means we're wired to avoid losses far more strongly than we pursue gains — even when the odds favour us.
- Narrow framing (the 'myopic' part). We tend to evaluate outcomes one at a time rather than as part of a long-term sequence. A single day's loss feels significant even when it's statistically meaningless noise. The long-term trend — which is what actually determines our wealth — gets buried under the short-term volatility.
Combine loss aversion with frequent evaluation and you get a toxic cocktail: investors who check their portfolios frequently experience more losses (because markets go down a lot in the short term), feel more pain (because losses hurt twice as much as gains), and respond by taking less risk (holding too much cash, selling during dips, avoiding equities entirely). They earn lower returns not because they chose bad investments — but because they looked at them too often.
The experiment that proved it
Benartzi and Thaler ran an experiment. They gave participants a choice between two investments: a low-risk, low-return bond fund and a higher-risk, higher-return stock fund. Crucially, they varied how often participants saw their returns.
One group saw returns every month. Another group saw returns every year. Another saw returns every five years. The investment options were identical across all groups. The only difference was the feedback frequency.
The results: how feedback frequency changes behaviour
| Feedback Frequency | % Allocated to Stocks | Expected Outcome |
|---|---|---|
| Monthly | ~40% | Lower returns, more cash drag |
| Yearly | ~67% | Better returns, more risk accepted |
| Every 5 years | ~90% | Highest expected returns |
Source: Benartzi & Thaler (1997). Figures are approximate based on the published findings.
Think about what that table means. Nothing about the actual investments changed. Nothing about the participants' financial situations changed. They were shown the same data, just aggregated over different periods. And their behaviour — and therefore their expected wealth — changed dramatically.
The monthly-feedback group experienced roughly eight down months per year, and each one stung. Their loss-averse brains screamed "this is too risky" even though the long-term trajectory was clearly upward. So they pulled back on stocks, missed out on the equity risk premium, and ended up poorer. All because they looked too often.
The maths that should make you delete your investing app
Let's put some numbers around how often markets actually go down, because it's both more and less than most people think:
How often markets fall — by timeframe
- •Daily: ~47% of trading days are negative. Nearly half. Every time you open your app, it's basically a coin flip whether you'll see red or green.
- •Monthly: ~38% of months are negative. Better, but still more than one in three.
- •Yearly: ~26% of calendar years show a loss for the S&P 500 since 1926. About one in four.
- •5-year rolling periods: ~12% show a loss. Down to about one in eight.
- •10-year rolling periods: ~5% show a loss. One in twenty.
- •20-year rolling periods: Never. In the entire recorded history of the S&P 500, every single 20-year holding period has delivered positive returns after inflation. Every single one.
Based on S&P 500 data 1926-2025. Past performance does not guarantee future results.
This is the fundamental mismatch. Your investing app updates by the second. Financial news updates by the hour. Your brain is getting daily fear signals from markets that almost never lose money over the timeframe that actually matters — the decades over which you're investing. The information frequency and the decision frequency are completely misaligned. Your app wants you checking daily because engagement is how it makes money. Your wealth wants you checking annually because distance is how you make money.
What the data says about investor behaviour vs investment returns
Every year, DALBAR publishes its Quantitative Analysis of Investor Behavior — and every year, it finds the same thing. The average investor dramatically underperforms the very funds they own.
Over the 30 years to 2023, the S&P 500 returned an average of roughly 10% annually. The average equity fund investor earned about 6-7% — that's 3-4 percentage points less per year. Over 30 years, that gap compounds into hundreds of thousands of pounds.
Where did that missing 3-4% go? Not to fees — those are separate. It was destroyed by behaviour: buying after markets have gone up (chasing performance), selling after they've gone down (panic), and switching between funds based on recent track records (the classic buy-high-sell-low loop). Every one of those decisions was triggered by looking at the numbers. If those investors had simply bought a broad index fund, set up an automatic monthly contribution, and never looked at the balance again for 30 years, they'd have earned roughly double.
The behaviour gap — why you earn less than your funds
Morningstar's "Mind the Gap" study measures the difference between a fund's reported return and what the average investor in that fund actually earned. Every year, the investor return is lower than the fund return — sometimes by a significant margin.
- ▸The gap is widest in the most volatile fund categories — more volatility = more emotional trading = bigger gap
- ▸It narrows in balanced and allocation funds where price movements are smoother and investors check less
- ▸The single biggest predictor of the gap is not fund fees, not market conditions — it's investor trading frequency
Why your brain is wired to be bad at this
This isn't a character flaw. Your brain evolved to keep you alive on the savannah, not to optimise a 30-year investment plan. On the savannah, frequent threats were real and required immediate action. A rustle in the grass could be a predator — ignoring it carried an existential cost. Your brain learned to treat any sign of danger as worth investigating immediately.
The stock market's daily fluctuations trigger the same ancient alarm system. A 2% drop feels like a threat because your amygdala processes it in the same neural circuits that process physical danger. The rational part of your brain knows that 2% daily moves are statistical noise. The ancient part sees red on the screen and starts preparing for flight.
The neuroscience of checking your portfolio
- ▸Dopamine and variable rewards. The same mechanism that makes slot machines addictive — unpredictable rewards delivered at random intervals — operates when you check your portfolio. Sometimes it's up. Sometimes it's down. The unpredictability itself is compelling. Your brain releases dopamine in anticipation of checking, not just in response to good news. This is why you reach for your phone to check even when you know nothing has changed.
- ▸Loss aversion in the brain. Neuroimaging studies show that losses activate the same brain regions as physical pain. A portfolio loss literally hurts — your brain experiences something neurologically similar to a physical injury. Avoiding pain is one of the strongest motivators in human psychology, which is why selling during a crash feels so compelling even when every piece of financial data says it's the wrong thing to do.
- ▸Recency bias. Your brain disproportionately weights recent information. A market drop this week feels more significant than the 10-year upward trend. This made sense when recent information was genuinely the most relevant (is there a predator nearby right now?). It makes no sense for multi-decade investing but the neural wiring hasn't caught up.
What I actually do
I used to check my portfolio daily. Sometimes multiple times a day. I'd open Trading 212 on my phone while waiting for the kettle to boil. I could tell you what the S&P 500 did overnight before I'd had my first coffee. It was compulsive and completely pointless — I was a long-term buy-and-hold investor checking prices I had no intention of acting on. The only thing the checking did was make me feel anxious on down days and euphoric on up days — an emotional rollercoaster that added precisely nothing to my returns.
Here's what I do now:
My no-checking system
- I deleted the trading apps from my phone. All of them. Trading 212, Vanguard, InvestEngine. They're on my laptop if I need them — but the friction of opening a laptop, logging in, and navigating to the portfolio page is high enough that I no longer check impulsively. Friction is your friend here.
- I have a quarterly calendar reminder. Every three months, I spend 15 minutes checking my portfolios. I look at: are my regular contributions still going through? Is my asset allocation still roughly where I want it (within 5% of target)? Are there any corporate actions or platform changes I need to know about? That's it. 15 minutes, four times a year.
- My contributions are automated. A direct debit leaves my current account on the 1st of every month. I never have to log in to make an investment — it just happens. The less I interact with my investment accounts, the more my money compounds undisturbed by my worst instincts.
- I stopped watching financial news. CNBC, Bloomberg, the business section of the BBC — all designed to make you feel like you should be doing something. They profit from your attention, not from your returns. I haven't watched financial news in years and I'm confident my portfolio has performed better because of it.
- When markets crash, I check even less. This is the hardest one but the most important. In March 2020, in the 2008 crisis, and in every sell-off since, the people who logged in and sold lost money permanently. The people who didn't look — or looked and did nothing — recovered everything and more. When the news is screaming about markets falling, that's your cue to close the laptop and go for a walk.
What if I really can't stop checking?
I get it. Some people have been checking daily for years and the habit is deeply ingrained. Here's a gentler approach:
First, don't try to go from daily checks to quarterly — that's too big a jump and you'll relapse. Try moving to weekly, then monthly. The goal is to lengthen the evaluation period gradually until your brain starts to internalise that the daily noise doesn't matter.
Second, if you must check, check the right thing. Instead of opening your portfolio balance, open a chart showing the 10-year or 20-year trend. The long-term chart is almost always up and to the right. It tells a completely different story than the daily price ticker. Training your brain to see the long-term trend rather than the daily wobble is its own form of behavioural conditioning.
Third — and this might sound odd — gamify not checking. Put a tally on your fridge. Every day you don't check, add a mark. Try to beat your longest streak. The dopamine system that currently rewards checking can be redirected to reward not checking. It's the same neural circuitry — you're just feeding it a different input.
The real bottom line
The best investors I know share one trait: they're bored by their own portfolios. They set up a sensible allocation, automated their contributions, and got on with their lives. The money compounds in the background while they focus on things that actually need their attention — their careers, their families, their health, their hobbies. They treat investing like watching grass grow. And their returns show it.
The worst investors I know — and I used to be one — check daily, react to every headline, adjust their allocation based on what they read on Twitter, and feel constantly anxious about money. They work harder and earn less. The market doesn't reward effort. It rewards patience. And patience requires distance.
Delete the app. Set up the direct debit. Check once a quarter. Get on with your life. That's the entire strategy. Everything else is noise — and noise costs more than most people realise.
For educational purposes only. This article discusses behavioural finance research and my personal experience. It is not financial advice. All investing carries risk. Past performance — including historical market recovery patterns — does not guarantee future results. The studies and statistics cited are for educational illustration of behavioural concepts, not forecasts. Your circumstances are unique — always do your own research.