The Checking Problem
You just made your first investment. The temptation is real: check it every hour, watch it go up and down, feel the dopamine (or anxiety) with each movement.
Don't.
Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.
Checking Daily
- • See lots of red days (normal)
- • Feel anxiety and urge to “do something”
- • More likely to panic sell
- • Studies show: worse returns
Checking Monthly/Quarterly
- • See the bigger picture
- • Less emotional attachment
- • Stay the course
- • Studies show: better returns
Recommended checking schedule:
- Monthly: Quick check that everything is running
- Quarterly: Review overall progress
- Annually: Consider rebalancing if allocations drifted
Turn off daily price alerts. Seriously. They don't help.
How often should long-term investors check their portfolio?
Taxes: Not as Scary as You Think
Investment taxes confuse everyone. Here's what you actually need to know:
You only pay taxes when you SELL (capital gains)
If your stocks go up 50% but you don't sell, you owe $0 in capital gains tax. These are “unrealized gains.” Tax is only due when you sell (realize the gain). This is why buy-and-hold is tax-efficient.
Hold 1+ year for lower tax rates
Short-term gains (held < 1 year): taxed as regular income (up to 37%)
Long-term gains (held 1+ year): taxed at 0%, 15%, or 20%
Big incentive to hold at least 12 months before selling.
Your broker sends tax forms
Each year (by mid-February), your broker sends a 1099 form with all your taxable transactions. You (or your tax software) just enter these numbers. You don't need to track every trade yourself.
Dividends are taxed when received
Unlike gains, dividends are taxable in the year you receive them - even if you automatically reinvest them. Most dividends are taxed at the lower “qualified” rate (0-20%), not your regular income rate.
| Your Income (Single) | Long-Term Rate |
|---|---|
| Up to ~$47,000 | 0% |
| $47,000 - $518,000 | 15% |
| Above $518,000 | 20% |
*2024 thresholds. These change slightly each year.
Bottom line: If you buy and hold index funds, you probably won't owe much in taxes until you sell (hopefully decades from now). When you do sell, hold long-term for better rates.
Want to Learn More About Investment Taxes?
This lesson covers the basics, but there's much more to learn. Our Tax Basics course goes deeper into capital gains, tax-loss harvesting, dividend taxes, tax-advantaged accounts, and common tax mistakes to avoid.
Take the Tax Basics CourseWhen do you owe capital gains taxes on investments?
Common Beginner Mistakes (Avoid These)
Panic selling on red days
The market drops 5%. You sell. It recovers. You missed the rebound. Historically, selling during downturns has been one of the biggest drags on investor returns.
Chasing hot tips and meme stocks
By the time you hear about a “hot stock” on social media, you're usually the last one to the party. Index funds beat stock-picking.
Waiting for “the right time”
“I'll invest when the market dips.” The dip comes. Now you're scared it'll drop more. The right time is now. Time in market beats timing market.
Over-complicating your portfolio
15 different funds, sector ETFs, individual stocks... more isn't better. 2-3 broad index funds beat complexity. Simple portfolios are easier to stick with.
Notice a pattern? Most investing mistakes are psychological, not financial. The math is simple. The emotions are hard. That's why automation (from Lesson 7) is so powerful - it removes you from the equation.
📋 When the Market Crashes: Your Survival Checklist
Markets drop 20%+ every few years on average. It feels terrible. Here's what to remember when it happens:
Don't check your portfolio
Seriously. Close the app. The number you see doesn't matter unless you sell.
Keep your automatic investments running
This is dollar-cost averaging at work. You're buying more shares at lower prices.
Remember: This has happened before
The market has recovered from every crash in history. 2008, 2020, dot-com — investors who held through recovered and then some.
Use your emergency fund for emergencies
This is exactly why you have one — so you never need to sell investments at the worst time.
Consider adding more (if you can)
Historically, crashes have been good times to invest more. But only if you have extra cash and job security.
Historical context: Since 1950, the S&P 500 has experienced 38 drops of 10%+ but recovered each time. Past recoveries don't guarantee future results, but patience has historically been rewarded.
Your Journey Continues
You've finished the Start Investing course. You know how to:
What to learn next:
- • Investment taxes: Go deeper on capital gains, tax-loss harvesting, and tax-advantaged accounts
- • Retirement accounts: Roth IRA, 401(k), and their tax advantages
- • Emergency fund: 3-6 months of expenses in savings before aggressive investing
- • Rebalancing: Adjusting your portfolio annually to maintain target allocation
- • Real estate: REITs and other ways to diversify beyond stocks