February 18, 2014
In the world of investing, it is easy to make decisions based on emotions and feelings. The fear of losing money or the prospect to make a quick dollar can easily cloud our judgment. In the heat of market turmoil, investors may find themselves making impulsive decisions or unable to implement their investment strategy. Emotional investing often leads to buying high and selling low, but discipline and objectivity can help investors remain committed to their long-term investment objectives through times of market uncertainty.
Emotions often creep into the way of implementing your investment strategy. If you're having trouble separating facts from emotions in your decisions, consider using an advisor, and create a rational plan based on your goals and stick with it. It is an advisor's responsibility to provide objective advice based on facts rather than feelings.
Fear and excitement are two emotions you are guaranteed to experience when investing. Investors spend much more time considering when to buy a stock as opposed to when to sell, which can potentially be very costly. If you find yourself in the process of making an impulsive decision, take a step back and remind yourself why you purchased the investment in the first place. If the investment no longer fits in your plan, cut it loose and don't look back. We can never make money looking in the rearview mirror and the only way to guarantee a profit is to sell where we have an unrealized gain. Please remember, your stocks do not love you, and they will never tuck you into bed at night. They are simply tools to help you build the retirement nest egg that will allow you to have the retirement of your dreams.
Ethan Wade, Financial Advisor
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).