In these uncertain times it is easy to feel like things are out of control.
It’s important to realise that investment markets are moving up and down all the time – stability is not ‘normal’.
Carl Richards from www.behaviourgap.com describes it like this:
“Imagine being on a boat in the ocean on a very still day. No wind. No swell. The water is flat as a mirror. The calm goes on just long enough for you to start to feel like it’s normal.
When a small wave finally does come, it feels big. When a normal-sized wave comes, it feels enormous. And when a big wave comes…?
As scary as they might feel, waves are normal. Even storms are normal. The question is, what do we do when a storm does come?
In terms of investing, people often freak out and abandon ship.
You know how that goes: We sell when the market is low because it’s crashing and that’s scary, then we buy when the market is high because it’s rising and that’s exciting.
Obviously, this is a very bad idea. The last thing you want to do as an investor is buy high and sell low’.”
As anyone who has been investing for a while knows, storms happen. Volatility is normal, ups and downs are expected. In times of turbulence focus on the longer term goal, not the short term result.
Talk to us if you want a better understanding of your investments and expected returns.