Keeping Investment Emotions in Check

“In the world of money and investing, you must learn to control your emotions” — Robert Kiyosaki

2 min read

Keeping Investment Emotions in Check

“In the world of money and investing, you must learn to control your emotions” — Robert Kiyosaki

2 min read

While Rudyard Kipling may not have been thinking about investments when he penned his famous poem ‘If’, his words will certainly resonate with investors at the moment. The current investment landscape undoubtedly presents a challenge, even for experienced investors, but those who can keep their head when all about are losing theirs definitely have the best chance of success.

Emotional Rollercoaster

It can be extremely difficult for investors to keep their emotions in check when there is so much economic and geopolitical noise being reported on a daily basis. But market volatility is normal and investors who hold a well-diversified, risk-appropriate portfolio and stay focused on their long-term objectives, goals and aspirations are historically best equipped to get through such periods.

Clear Goals are Essential

Setting clear goals and developing a corresponding plan to achieve them is invariably the key to investment success. Although plans may need to be adapted from time to time to take account of changes in individual circumstances or investment goals, having a well-thought-out strategy helps investors deal with unexpected events and remain calm when markets become turbulent.

Reacting to Market Downturns

When you see significant market downturn, it is important to not panic. Instead of cutting your investments in half or immediately selling everything, an incremental approach could benefit you. Small, incremental contributions on a regular basis will enable you to take advantage of lower prices by use of franc-cost averaging (or dollar/pound-cost averaging).

Markets are constantly moving up and down, and no matter where you sit on the risk scale there will almost always be a time at some point where things are not going in your favour. If this does happen, it is important to remember that this is part of the long-term investment process.

Should you be approaching the time when you need to access your funds, it is usually worth having already moved out of riskier assets and into lower risk assets in order to protect your portfolio from the vagaries of the market. This should be, or have been, discussed with your Adviser from the inception of your portfolio.

Guiding You to Success

It is only natural that decisions made during market downturns may be due to panic. However, at Patterson Mills, we would always recommend getting in touch before making any decisions that may have a permanent impact.

We aim to guide you through any market downturns towards success, so make sure you get in touch today and book your initial, free, no-obligation meeting. Send us an e-mail to info@pattersonmills.ch or call us direct at +41 21 801 36 84.