When the markets bounce around, investing requires discipline and patience to overcome normal emotional tendencies.

It is emotions, particularly fear and greed that can wreak havoc on our investment plans. It’s certainly easy to give in to the temptation to make major changes to what otherwise was a viable investment strategy when the market slumps or soars. Often we feel that we are missing out if we don’t follow the masses, chasing the latest hot fad only to find it doesn’t pan out. All these emotions are normal – we are after all just human. The problem is when we act on these feelings and in doing so alter what otherwise was a well thought out investment plan. The more we can learn about how our emotions can get in the way the more likely we are able to overcome emotional investing.

Don’t make changes in the heat of the emotion. In this way you will stay the course with a prudent investment plan and have a much greater probability that your investment portfolio will grow over time.

Read our recent blog on how emotions impact the average the investor - Better than average Investors.

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