June 26, 2023
3 Tips to Help You Manage Your Emotions in Investing
Investing can be an emotional rollercoaster, but managing those emotions is key to making smart investment decisions. Here are three quick tips to help you have more confidence in your investing and not get pulled off track by the emotions of money.
Learn from the past:
You know the phrase ‘an ounce of prevention is as good as a pound of a cure’? The same goes for investing. Before you get started, it’s helpful to look at data from the past and get a sense of what typical performance looks like for your investment of choice. By knowing what to expect based on historical performance, you are less likely to react when the market shifts. This will also help you be wary of when performance is below expectations and when you might want to change your positions. Big picture insight prevents short sighted decisions that can have longer term implications. Arm yourself with data, and keep a cool head when market tensions are on the rise.
You know the phrase ‘an ounce of prevention is as good as a pound of a cure’? The same goes for investing. Before you get started, it’s helpful to look at data from the past and get a sense of what typical performance looks like for your investment of choice. By knowing what to expect based on historical performance, you are less likely to react when the market shifts. This will also help you be wary of when performance is below expectations and when you might want to change your positions. Big picture insight prevents short sighted decisions that can have longer term implications. Arm yourself with data, and keep a cool head when market tensions are on the rise.
Trust the process, make a plan:
Investing is not for the faint of heart and sometimes it’s best to go back to what you you planned from the get go. If you start your investment journey without a vision of your goals and target gains, it’s easy to lose sight of where you’re headed and make a series of smaller decisions that add up to a big impact. Before you get started, sit tight and make a list of goals, risk tolerance, and what types of asset classes interest you. Before starting any program, it’s always best to consult your financial advisor and collaborate on a plan that will balance your risk/return comfort levels. When things get tough, pull out your plan and make sure you're making decisions that line up with the plan you made when you had a cool head.
Investing is not for the faint of heart and sometimes it’s best to go back to what you you planned from the get go. If you start your investment journey without a vision of your goals and target gains, it’s easy to lose sight of where you’re headed and make a series of smaller decisions that add up to a big impact. Before you get started, sit tight and make a list of goals, risk tolerance, and what types of asset classes interest you. Before starting any program, it’s always best to consult your financial advisor and collaborate on a plan that will balance your risk/return comfort levels. When things get tough, pull out your plan and make sure you're making decisions that line up with the plan you made when you had a cool head.
Avoid making decisions based on panic or euphoria:
You made some money? Great. You lost some? Not so great. No matter who you are or what ou invest in, part of investing is riding the ups and downs. When you see excellent returns on an investment or dismal returns on others, that doesn’t mean that is what you can come to expect every time. Getting greedy or too scared can make you miss out on opportunities that might not be the first thing in your mind. Hasty decisions can lead to missteps that can cost investors over time. Try to take a step back when you get too excited or too discouraged. Go back to your plan, go back to the data, and make decisions when emotions aren’t running high. Keep calm and trade on!
You made some money? Great. You lost some? Not so great. No matter who you are or what ou invest in, part of investing is riding the ups and downs. When you see excellent returns on an investment or dismal returns on others, that doesn’t mean that is what you can come to expect every time. Getting greedy or too scared can make you miss out on opportunities that might not be the first thing in your mind. Hasty decisions can lead to missteps that can cost investors over time. Try to take a step back when you get too excited or too discouraged. Go back to your plan, go back to the data, and make decisions when emotions aren’t running high. Keep calm and trade on!
The most important thing to remember is that everyone is in the same boat when it comes to market shifts. We all feel the joy and pain that comes with investing. No matter your scale, your strategy, or your appetite for risk–we all have to play the game.
Happy Trading!
Happy Trading!