Avoiding emotional investing

Keep emotions in check and rely on strategies to help you reach your goals

As your investments gain or lose value, it’s normal to feel emotions ranging from excitement to fear. When these emotions guide your investing decisions, it can lead you to make decisions that don’t line up with your goals – and can even keep you from reaching them. Here’s how:

• Anxiety over falling prices can cause you to sell or trade an investment too soon
• Confidence that prices will continue rising can cause you to keep an investment too long or try to time the market
• Timing the market can be costly because the market’s worst days are often followed by its best ones; withdrawing money in a downturn and missing a few top-performing days can greatly affect your returns (see “The market’s best days” chart)

Instead, consider using strategies like these to stay on track:

• Make a long-term plan. It will help you stay calm and stay the course when the market is changing. Your retirement plan provides tools and support to help you create one.
• Set up regular contributions. This helps reduce the impact of market swings because you’ll buy more investments when prices are lower and fewer when prices are higher. Increasing contributions throughout your career can also help steadily build your portfolio.
• Have a diverse investment mix. Spreading your investments among a wide range of options helps protect your savings during volatile markets. Review your account online to check your asset allocation and investment selections.