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.