Young investors may be hurting their long-term returns with this investing habit, here’s how to avoid it

Young investors are taking a more active role in managing their money, with Gen Z and millennials checking their investments and trading more frequently than older generations. While staying informed can help investors understand their portfolios, excessive monitoring and frequent trading can also encourage a short-term approach that may conflict with long-term financial goals.

A new report by CFA Institute, based on a survey of more than 2,400 mass-affluent, high-net-worth and very-high-net-worth investors across India, Canada, Singapore, the UAE, the UK and the US, highlights this growing engagement among younger investors.

Young investors are checking their investments more often

According to the report, 63% of Gen Z and millennial investors across the six markets surveyed said they monitor or check the value of their investments at least once a week. This includes investors who check their portfolios multiple times a day, daily or weekly.

Trading activity is also relatively high. About 46% of young investors said they buy, sell or trade investments at least weekly. Among young high-net-worth and very-high-net-worth investors, the proportion rises to 52%.

The figures are global survey results and should not be interpreted as India-specific percentages. Indian investors were included in the overall survey, but the report does not give the 63% and 46% figures specifically for India.

The report also found that 40% of young investors consume market news daily. Together, these findings point to a generation that is closely engaged with markets and wants greater control over investment decisions.

When monitoring becomes short-term thinking

Checking a portfolio regularly is not necessarily a problem. The concern arises when frequent monitoring leads investors to react to every market movement.

CFA Institute specifically warns that frequent monitoring and trading can create a short-term view of investing that may conflict with an investor’s goals. It recommends that advisers help young investors remain focused on their investment objectives while supporting their desire to stay engaged with markets.

For a long-term investor, this distinction matters. A market fall on a particular day or week does not necessarily change the underlying investment objective. But repeatedly checking portfolio values can make short-term gains and losses more prominent in an investor’s decision-making.

Frequent trading can also introduce additional costs and increase the risk of making decisions based on short-term market movements rather than the original investment plan. CFA Institute’s research on short-termism notes that high portfolio turnover can increase transaction costs and reduce investor returns.

What young investors should focus on

The answer is not to stop tracking investments altogether. Instead, investors need to distinguish between monitoring a portfolio and constantly reacting to it.

Young investors can use regular portfolio reviews to check whether their asset allocation, risk level and investments remain aligned with their financial goals. But every market movement does not necessarily require a transaction.

This becomes particularly important for younger investors because they are also more exposed to a wide range of investment information. The CFA Institute report says Gen Z and millennials increasingly combine advice from financial professionals with information from apps, social media, finfluencers and AI tools. Human advisers nevertheless remain the most trusted source of investment guidance.

The report therefore suggests that advisers have an important role to play in helping younger investors manage behavioural risks such as FOMO and overconfidence, while keeping their investment decisions aligned with longer-term goals.

For investors, the key takeaway is simple. Being engaged with your portfolio can be useful, but frequent checking should not automatically translate into frequent buying and selling. A long-term investment strategy needs room for markets to move without every short-term fluctuation triggering a change in the plan.