Personal Finance: Investing Psychology For Emotional Control

Personal finance investing offers you the most control over your own finances, but it also requires  a steady hand. It’s easy to get overly emotional and overwhelmed when it comes to personal investments. Follow these steps and regain your confidence!

Before You Invest

If you draft a diversified investment plan, you’ll be ready to handle a fluctuating market. Don’t invest until you’ve got a plan!

Step 1 – Don’t Give in to Panic

One of the worst things you can do is pull all of your money out of the market at the first sign of trouble. The consequences of this include:

  • further driving down the market (which is built on the faith of investors)
  • leaving the market at a loss
  • losing your confidence in the market and your chance to earn the money back
Step 2 – Remind Yourself of Your Fail-safes

You should have a diversified personal finance investing plan, so remind yourself that all is not lost because:
  • you’ve invested in multiple companies and not all of them will fail irrevocably at once
  • you still have money in savings, retirement plans, CDs, and bonds to tide you through market lows
Step 3 – Stick to Your Plan

One or two setbacks shouldn’t derail your entire personal finance investing plan. You never sought to become a millionaire overnight. Your investments can weather bad times and earn you money in future years, so stick with them, even if you have to adjust your investments a little.


blog comments powered by Disqus
Scottrade