Podcast: The Most Important Thing You Can Do After You Make An Investment

Benzinga has partnered with Fidelity to bring you the Fidelity Investing Podcast, a podcast that offers quick insights from Fidelity subject matter experts about the world of investing. Conversations will last around 10 minutes and will cover everything from how to place an order to what to look for in a stock. Catch the latest episodes on iTunes, Google Play, Soundcloud, Stitcher, or tunein.

In this episode of the Fidelity Investing Podcast, Benzinga chats with Brian Isabell, a member of Fidelity’s trading strategy desk, to learn that placing a trade doesn’t end with just hitting “buy” or sell”—you have to monitor a trade to make sure it’s working for you.

How To Monitor A Trade

While a lot of advice for beginner traders focuses on what they should do before they place a trade, often what happens after is just as important. Trades need to be monitored, and depending on the investor’s time horizon, monitored frequently.

But how exactly should traders go about doing that? Basically, by approaching the trade with fresh eyes.

“Primarily, when you're monitoring you want to use the same criteria that you used to get into that trade,” Isabell said. “You want to reevaluate…[and ask] ‘does this still make sense for my portfolio?’”

The Most Important Thing You Can Do After Place A Trade

Isabell said that specifically, it’s important for investors revisiting their moves to understand why they did so in the first place. A written record of your thoughts can help provide that.

“I encourage people to write [their] outlook down so that they can reference it in the future,” Isabell said. “If a few months go by and you say ‘why am I in this position?’ You can go back and see what you wrote down and [see] ‘this is why I believe this is an appropriate trade.’ If that’s no longer the case, then that can be your first hint to say, ‘if this is not the case do I still want to have the exposure that I have?’”

Tinker With A Trade Or Plug And Play?

If you’re new to investing and the idea of having to keep track of trades is stressful, keep in mind that how often you monitor trades depends on your time scale as an investor. Not every trade requires constant observation, and in fact, most won’t if you’re investing for the long-term.

“Something that, for instance, is a long term trade that you plan to own for years and years and wait for it to appreciate over that time period, you probably don’t have to monitor that quite as frequently as a short term trade,” Isabell said. “So if you’re getting in and getting out of something within the course of a couple of days, you’re going to want to be monitoring that much more closely because it's only got a life span of a few days. You probably want to watch [that] everyday.”

You can hear all of Brian’s advice on how to evaluate a trade in the full episode. And be sure to subscribe to the podcast on iTunes, Google Play, Soundcloud, Stitcher, or tunein for the latest episodes.