Controlling your investment emotions
Home >
All >
Controlling your investment emotions
While Rudyard Kipling may not have been thinking about investments when he penned his famous poem ‘If’, his words will certainly resonate with investors at the moment. The current investment landscape undoubtedly presents a challenge, even for experienced investors, but those who can keep their head when all about are losing theirs definitely have the best chance of success.
Emotional roller coaster
It can be extremely difficult for investors to keep their emotions in check when there is so much economic and geopolitical noise being reported on a daily basis. But market volatility is normal and investors who hold a well-diversified, risk-appropriate portfolio and stay focused on their long-term objectives, goals and aspirations are inevitably best equipped to get through such periods.
Clear goals are essential
Setting clear goals and developing a corresponding plan to achieve them is invariably the key to investment success. Although plans may need to be adapted from time to time to take account of changes in individual circumstances or investment goals, having a well-thought-out strategy helps investors deal with unexpected events and remain calm when markets become turbulent.
Stay the course
While it is easy to say that the nature of investing dictates that the value of investments can fall as well as rise, it is always difficult for investors to see the value of their portfolios drop during periods of market weakness. But those investors who maintain a long-term outlook are most likely to avoid expensive knee-jerk mistakes that realise losses and result in them missing out on gains when markets do recover. At times like these, being confident in your plans and staying the course is therefore paramount.
It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency.
Information is based on our understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.
Tax treatment is based on individual circumstances and may be subject to change in the future.
Other Insights of interest
16th April, 2025
Taking steps to avoid a retirement overspend
A fifth of respondents to a survey1 have consistently spent more than they expected to…
Read full insight
16th April, 2025
Family tensions over money talks – time to break the taboo
Many wealthy individuals hesitate to discuss financial planning due to fears of family disagreements, with…
Read full insight
10th April, 2025
Economic Review March 2025
Chancellor trims spending plans Rachel Reeves delivered her Spring Statement on 26 March, unveiling welfare…
Read full insight
2nd April, 2025
End of tax year IHT recap – gen up on gifting allowances
Recent HMRC data shows that IHT receipts rose to £4.3bn during the period from April…
Read full insight