Today's up-and-down markets might have you confused about what to do next. That uncertainty can make you prone to certain investing mistakes. Here's what to watch out for and when to take action.
and renewed fears of a looming recession, this year's record run-up on stocks has been put on pause.In times like these, investors are susceptible to getting swept up by their emotions.
Dan Ariely, chief behavioral economist at personal finance app Qapital and professor of behavioral economics at Duke University, said that there are ways to avoid getting caught up — and making investment moves you could regret later.Resist the urge to check your portfolio"What happens on the day that it goes up?" Ariely said. "You feel happy.But the best action to take in this market may sound counterintuitive: Don't look at your portfolio.
Ariely recalled how during the financial crisis, he found himself caught up in checking his accounts more frequently.One Friday morning, he noticed he was consumed with checking his investments. And that put him in a bad mood.To change that, he locked himself out of his accounts, and then enjoyed the weekend with his wife.
"If we're going to look at it going up and down, we're just going to be more miserable," Ariely said. "We're not only going to be more miserable, but act on it."Of course, there are times when you have to log in. The key is to be intentional when you do. "Decide what change you want to make, and only then open your portfolio," Ariely said. "It's never a good idea to open up your portfolio for fun and then decide what to do."The decisions you make about the stock market are always decisions about the future, Ariely said."It's water under the bridge," Ariely said. "It's gone. It's over."
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