Why Leaving Emotions Out of Your Investment Process is Key

Are you losing money on investments because of sudden decisions you make? If you’re an impulsive investor, a mistake in timing can destroy your nest egg. That’s why it’s crucial to leave emotions out of your investment process. To help master your feelings when it comes to your assets, here are some tips to remember.

Upswings

It’s difficult not to want to pour money into a market that appears to be on an upswing. Having that fear of missing out can backfire, especially in times when a market is volatile. Making a big purchase decision based on emotions, as opposed to market analysis, can hit your portfolio hard when the market corrects or takes a downward dive.

Downswings

When many investors see a sudden downswing, their first reaction is to pull their money out to prevent any further losses. However, this response can cause people to lose a lot of their hard-earned savings, especially when the market curtails in the other direction soon after. What professional investors do instead is diversify their investments, make sure their downside is protected, and hold steady when the market swings. They leave emotions out of their investment process and stick to their plan.

Finding the Right Balance

Very few people have the right instincts to predict the market. It takes considerable expertise and market know-how to not get caught up in the euphoria of a bull market or the fear during a bear market. Remaining disciplined and knowing how to resist emotional reactions to volatility takes practice. That’s why it’s essential to have a professional on your side – one who can help you develop a secure, diversified portfolio and provide you with a sound strategy to improve your decision-making skills (skills necessary to prevent you from making quick mistakes when the market fluctuates).

Hiring the Right Mind

Talking to an advisor about your financial goals, needs, and potential risk level can ensure your portfolio is appropriately balanced to weather all the economic seasons. A seasoned professional has the instincts and knowledge necessary to help you build the portfolio needed to produce results, even in troubling markets. They can give you the advice and tools you need to stay on track without making emotionally-based decisions that can impact your financial future.

There are many tools and products out there that can help you gain the insight you need to help improve your performance level and secure your investments. Let us show you how! At The Beacon Group of Assante Financial Management Ltd., we can help you create a financial plan that will teach you how to leave emotions out of your investment process and maximize your investment returns. Contact us today to set up an appointment!