In crisis the tendency is for all of us to react emotionally and follow the herd. With headlines screaming a global economic downfall due to a flu pandemic, remember you are genetically hardwired to react in certain ways.
If you find yourself responding outside your inherent behavior because your reaction is to the coronavirus not the market turbulence, STOP – and check yourself before you wreck yourself.
Get a handle on the facts and the reality of the situation before you make a decision, hastily dumping investments or rushing to add suddenly inexpensive “buys” to your portfolio.
Behaviorally smart investors and their advisors know that everyone reacts differently to turbulent markets. Don’t get mixed up with the herd mentality; don’t be distracted by outgoing colleagues and friends rushing to jump on the bandwagon of what everyone else is doing.
If you’ve found this last week unbearable, its likely you’ve misjudged or are unaware of your own behavior and risk tolerance. This is important insight for every investor to know.
If you have a financial advisor skilled in understanding financial personality, be guided by them.
If not, commit to understanding your own financial personality before it derails your investment strategy and wrecks your retirement plan. It only takes 10-minutes and may be the best investment you make.