Article Licenses: CA, DL, DL, UK, US
Compliant content provided by Adviceon® Media for educational purposes only.
Psychological fear can hold one back from investing. People behave according to their mind-set. Some of the following thinking can keep one from not putting their money to work by buying equity investments such as equity investment funds. If you have said any of the following statements you may be experiencing investor anxiety:
“I think the markets will pull back and lose some value.” I will wait and invest when this happens.” This viewpoint is based on the need for having a belief confirmed before acting, where the investor must minimize any evidence that contradicts their belief-mantra. The media frequently offers bad news if the market has a low day, and it is easy to hear only this kind of information while filtering out other positive news. This process can paralyze an action plan to invest for years.
“I want to immediately sell the investment, if I see a profit.” People might sell an investment early once it rises in value, for fear of any future loss. Aside from considering taxation, an investment with either a gain or a loss, once sold, ends any future potential of that investment rising in future value. To avoid this mind-set one should have a disciplined written plan for buying and or selling investments that can be frequently referred to.
“The market is bound to correct and head downward because it is at a peak.” Anchoring our point of view occurs when someone assigns a reference number, like a 52-week high or low, to compare a price of an investment stock or unit value of a fund or a stock exchange’s last peak value. Past price movements are poor predictors of future price performance. When you invest for the long-term for retirement, using past price patterns is comparable to driving your car while gazing in the rear view mirror as a reference.
The above emotional mind-sets can ruin or avoid forming an otherwise great investment plan. Work with your investment advisor to help you gain an understanding of how the mind can trick us into failure simply by not investing over the long term. He or she can help you develop a risk tolerance profile along with an investment plan.
“Individuals who cannot master their emotions are ill-suited to profit from the investment process.” Benjamin Graham
Publisher's Copyright & Legal Use Disclaimer Replication is prohibited beyond the use of this website. The publisher does not guarantee the accuracy and will not be held liable in any way for any error, or omission, or any financial decision or purchase or use of a financial product, including investment or insurance products, and suggest that a professional advisor's counsel is sought, especially with regard to Mutual Funds and Segregated Funds and Investment Funds which have investment risks as noted in the Mutual Fund Disclaimer. All rights reserved by Adviceon®
Disclaimer The particulars contained herein were obtained from sources which we believe are reliable, but are not guaranteed by us and may be incomplete. This website is not deemed to be used as a solicitation in a jurisdiction where this representative is not registered. This content is not intended to provide specific personalized advice, including, without limitation, investment, insurance, financial, legal, accounting or tax advice; and any reference to facts and data provided are from various sources believed to be reliable, but we cannot guarantee they are complete or accurate; and it is intended primarily for Canadian residents only, and the information contained herein is subject to change without notice. References in this Web site to third party goods or services should not be regarded as an endorsement, offer or solicitation of these or any goods or services. Always consult an appropriate professional regarding your particular circumstances before making any financial decision.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investment funds, including segregated fund investments. Please read the fund summary information folder prospectus before investing. Mutual Funds and/or Segregated Funds may not be guaranteed, their market value changes daily and past performance is not indicative of future results. The publisher does not guarantee the accuracy and will not be held liable in any way for any error, or omission, or any financial decision. Talk to your advisor before making any financial decision. A description of the key features of the applicable individual variable annuity contract or segregated fund is contained in the Information Folder. Any amount that is allocated to a segregated fund is invested at the risk of the contract holder and may increase or decrease in value. Product features are subject to change.