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Mind Over Markets – A Behavioral Guide to Investing

Mind Over Markets – A Behavioral Guide to Investing

October 03, 2022

When market volatility is headline news and account values start to fall, it’s easy to understand why investors get jittery. Even with a boatload of historical data to support us, in times of stress we all struggle to overcome our natural tendencies to make poor decisions about money.

The fundamentals of investing teaches us that we should seek to buy low and sell high. But what happens when you are concerned about how low things can go? How do we avoid making decisions that compromise our long-term wealth goals? In light of the recent turbulence in the stock market, you might be looking for answers to these questions.

Here's what we know. Investing in the capital markets gives us a fighting chance to enjoy a comfortable life and a dignified retirement. But with it comes a dilemma: we must undertake risk to meet our financial needs, yet we are psychologically ill-equipped to do so. So how do we balance human needs versus human nature?

This fascinating white paper from Virtus discusses a variety of behavior and cultural factors that influence the way we think and act about money, including fear, greed, expectations, discipline, luck, and much more. Once you’ve had a chance to read through it, give our office a call if you still have concerns or questions. We want you to feel confident about how your financial plan is constructed to weather the storms.