Your Emotions and Investing
The current bull market began in March 2009 and continues through today. While it has been a good market for investors, it also makes them nervous wondering when the market will turn. All investors know the market goes through cycles, but that doesn’t make people any less nervous about their financial future. The key, however, is to avoid letting your emotions deter you from a solid investment strategy. During any portion of the market cycle, an investor’s emotions can lead to irrational decisions as they could be on a high of a great bull run or in a panic when the bear enters. Both have the potential of negatively impacting investment performance. So how do you control those emotions? You will never be able to eliminate your emotional responses to your investments, but you can hold on tight to a solid investment plan that looks at performance over the long term. Having a plan based on your objectives and risk tolerance with an asset allocation and diversification that is aligned to your financial situation is key. Additionally, you will want to stress test your plan to understand how poor market conditions can affect your plan. Performance modeling can bring you peace of mind knowing that you will be able to ride out a market decline, or it can also lead you to make adjustments to your plan to better meet your needs.
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This newsletter was prepared by Integrated Concepts Group, Inc. The opinions expressed in this newsletter are for general information only and are not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. The views expressed are those of the author and may not necessarily reflect those held by PlanMember Securities Corporation. Material presented is believed to be from a reliable sources and PSEC makes no representation as to it accuracy or completeness.