Given the volatility the market has experienced so far in 2020, today we explore investor psychology, and how we sometimes need to fight our instincts.
Evolution has programmed us for "fight or flight" when confronted with a stressful stimulus, for example a large loss of money. And psychologically, losing money is twice as powerful as gaining it.
We look at a study that shows individual mutual fund investors averaged a return of only one third what the overall market did - because they gave into temptations and made mistakes.
Investors should feel nervous when the market fluctuates, but that doesn't mean they need to act.
The events of 2020 have taught us that the market and its forces are impossible to predict, and you need a financial plan built to weather any financial storm.
Resources:
Birch Run Financial Website: https://www.raymondjames.com/birchrunfinancial/
Email Birch Run Financial: info@birchrunfinancial.com
Call Birch Run at 484-395-2190