Emotional Investing: Protecting Yourself From Yourself

Quinn Waddington - Apr 05, 2018
My First Quarter Market Update discussed the large amount of volatility in the markets lately and how that breeds even worse emotional investing errors, as investors suffer from FOMO (fear of missing out) as the markets rise quickly and then panic

My First Quarter Market Update discussed the large amount of volatility in the markets lately and how that breeds even worse emotional investing errors, as investors suffer from FOMO (fear of missing out) as the markets rise quickly and then panic when the markets drop.  This emotional investing often leads to selling low and buying high, which is how many lose money in the markets.

Although there are a number of different strategies that attempt to beat the market (not all successful), there is one that is tried and true, that I have been using for clients.  The benefit of this strategy is that is very easy to employ, removes all emotional conflicts and can be implemented in very low-cost portfolios.  I am talking about regular rebalancing.

A structured rebalancing process helps investors add to positions that have performed worse relative to others and reduce exposure to investments that are higher.  Buying low and selling high.  Using this strategy with Exchange-Traded Funds (ETFs) also eliminates any company risk and reduces costs compared to mutual funds and other more tactical portfolios.

Contact me today to find out more about this low-cost strategy and how it can fit into your overall Financial Plan.

quinn.waddington@canaccord.com or (604) 699-0874