The Investor’s Cycle of Emotions

When it comes to investing, don’t let your emotions get in the way—stay focused on the financial plan developed to attain your long-term objectives. Investor behavior varies depending on what happens in the stock market.

• When the market goes up significant gains can result; with expectations generally satisfied, investors can become enthusiastic, upbeat, even euphoric.
• When the market goes down, anxiety and fear can result.
• And when the market produces returns, expectations of a rosier future spark renewed investor optimism.

Determine the Right Asset Balance and Your Personal Risk Tolerance

It’s normal for investors to experience a range of emotions. In fact, it’s often said that investing is the art of finding the right balance between the risks we’re prepared to take and the optimal returns that will let us reach our financial objectives.

Invest Without Losing Sleep

Here are some basic rules to help you keep your emotions in check when you invest:

• Establish your investor profile and invest accordingly
• Set up a long-term investment strategy
• Invest regularly
• Stay in the market