For most people, investing is often mixed with emotions. When the market goes up, a feeling of excitement will come. When the market goes down, it’s easy to get frustrated.
There is no benefit to being emotional while investing. If investment declines, that doesn’t necessarily mean bad news. In fact, it provides an opportunity to buy more assets at a lower price.
This is in line with the classic investment strategy of ‘buy low, sell high’.
This strategy may not work if you invest emotionally. Therefore, it is very important to control emotions while investing. When the market crashes - and it certainly will - this may be the best time to consider buying additional assets rather than selling them in a panic. If your only reaction to a market crash is ‘sell, sell, sell’, it’s a good idea not to join the stock market.
In the long run, the market will rise again (yes, it will rise because it is a ‘roller-coaster’!). However, the risk is that it will take a long time to recover, and you may have to sell it before it can recover.
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BUSINESS & MONEY
