30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances

Part X. Monitor Your Investments

Like everyone, I've had both good and bad bosses in my life. The worst ones hovered, offering feedback and advice on the most straightforward of tasks. Others, meanwhile, were so hands-off that I was never quite sure where I stood.

The best bosses—and I'm lucky enough to have had a few of them—manage to find the right balance. They pay attention to what their employees are doing but don't swoop in and take over unless it's necessary. They allow their employees to learn from them but also give them room to develop their own styles. They're willing to let small mistakes go but take action if there's a problematic pattern.

You want to steer a similar middle course when managing your portfolio. Being hands-off is far better than being too hands-on, but you also want to pay enough attention to your portfolio that you can make corrections if you need to. Like a good boss, you want to judge an investment on the totality of its record, not on what it's done (or hasn't done) for you lately.

And just as a good manager will be disciplined about reviewing your performance and telling you where you stand, it's also important to be disciplined about checking up on your portfolio's performance, and—even more important—its fundamentals: whether your mutual funds have had manager or strategy changes, for example. Because it's easy to get emotional and make rash investment decisions when the market is gyrating wildly, you should plan to monitor and make changes at predetermined ...