The No. 1 mistake IRA contributors make, according to experts


When the market gets bumpy, it's natural to want to check in on your investment accounts. Resist that urge.

Constant monitoring is "going to make you crazy," says Marguerita Cheng, a certified financial planner and the CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland. In fact, checking your retirement account balance too often is the No. 1 mistake IRA contributors make, Cheng says.

Tim Casserly, a certified financial planner at Arista Wealth Advisors in Albany, New York, agrees. "When you check the market performance day to day, it's easy to forget you have a 40-year time horizon," he told Grow earlier this year. That can lead investors to make panicked moves with costly consequences.

Your aim should be to check in just often enough to make sure you're on track to meet your goals, while staying committed to your long-term investment strategy.

Here's how advisors suggest you do that.

Every three months: Review your account

Experts typically recommend you check your portfolio balances no more than quarterly. Even then, your plan should be to review, without necessarily making changes. Remind yourself that volatility is normal and don't lose sight of the fact that the long-term historical average annualized return for the S&P 500 is almost 10%.

"The markets will have some downs — but historically speaking, the ups outweigh the downs," Casserly says.

Every six months: Adjust your investment mix

Once or twice a year, advisors recommend tweaking your investment mix to bring your asset allocations into line with your long-term plan. That move, called rebalancing, is meant to manage your risk while producing returns that keep you on track to meet your goals.

The right mix of investments will depend on factors like your age and risk tolerance. Baltimore-based money managers T. Rowe Price suggest these goals:

  • In your 20s and 30s: 90% to 100% in stocks (because of your long investment timeline), with up to 10% remaining in bonds.
  • In your 40s: 80% to 100% in stocks, with up to 20% remaining in bonds.
  • In your 50s: 60% to 80% in stocks, 20% to 30% in bonds, and up to 10% in cash.
  • In your 60s: 50% to 65% in stocks, 25% to 35% in bonds, and 5% to 15% in cash.

Don't let current market conditions sway you into mistakes like taking money out of the market. "Your IRA is a long-term investment vehicle," Cheng explains, "and you don't want to take your long-term money and invest it with a short-term time horizon mindset."

More from Grow:

acorns+cnbcacorns cnbc

Join Acorns


About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2021 Acorns and/or its affiliates.

NBCUniversal and Comcast Ventures are investors in Acorns Grow Incorporated.