Invest with Your Head, Not with Your Heart

Are you moved by the swings in the stock market, ready to trade at a moments notice? Or are you looking for the hottest stock that will undoubtedly make you thousands of dollars? Resist the urge to give in to the temptation of emotional investing. Invest with your head and not with your heart. Here are a few tips to avoid the pitfalls of emotional investing:

Don’t Overreact in Market Volatility

Being glued to every peak and valley of the stock market can pave the way to making risky decisions. Avoid hasty decisions in a time of market volatility. Do not make decisions based on outdated advice or be subject to the latest headlines. Think twice before selling off stocks. Not sure what to do? Consult a seasoned financial professional who has weathered market volatility.

Slow and Steady Wins the Race

Don’t make decisions that you will regret in the long run. As the saying goes, slow and steady wins the race. Be sure you are cutting your losses and maximizing gains. However, do make sound decisions to meet your financial goals. Consider investment goals and timing before making decisions. Aim for a diversified portfolio and proper allocation for your assets to create a solid financial footing for your future.

Learn from the Past

Everyone had learned from the trying times of 2008 when the U.S. entered the Great Recession. While that time may have appeared catastrophic a the moment, people survived. Not reacting in fear and making strategic decisions (not emotional ones) was the key to success. Weathering the storm let to brighter days ahead.

Although the future is uncertain, investors can control their reaction to market volatility. Selling at a moment’s notice and acting in fear is not wise. Investing with your head – not with your heart – will help you stay the course.