A big part of investing is human behavior. When the market takes big swings in one direction or another people react in unpredictable, but understandable ways. This can create stress and lead to poor decision makings. We’d like to help you mitigate those reactions with a few suggestions.
Do: Call your advisor
Your financial advisor knows you and your plan and has likely dealt with tumultuous times on Wall Street before. One short talk with them at an anxious time is usually enough to relieve your stress.
Don’t: Repeatedly check your accounts
You should know what is in your accounts and what their goals are in the long term. That being said, checking your accounts multiple times in a day or even week will affect your life far less than it will affect how you feel about it. If you are constantly checking your performance you have lost sight of your long-term goals, it’s time to call a professional.
Do: Think before you spend
This is where financial planning meets investment planning. If you have a major purchase planned for the year, talk to your advisor about getting it done strategically. If things are up recently, you are locking in those gains. Conversely, a down market is not the ideal time to take money out of the market.
Don’t: Be afraid to spend
There is a difference between being mindful and making decisions from a state of anxiety, like we mentioned above. If you have reached retirement and are taking income from assets, you’ve likely planned to do so both in good and bad market conditions. Once you have a plan, do not be afraid to execute it.
Do: Think about opportunities
If the market is performing poorly overall, take a minute to think about some investments you missed out on that you’ve been kicking yourself over ever since. Take a look at what they’re trading at and call your advisor to decide together whether now is the time to take advantage.
Don’t: Beat yourself up
The world of investing is incredibly competitive, complicated, and volatile with no place for pride. Even the very best of the professionals make poor decisions. Rather than worry about mistakes you’ve made in the past, now is the time to look to the future with a clear and open mind.