3 Tips to Keep Emotions From Causing Investing Mistakes
Markets are always rising and falling. News is always breaking. And investors are always fretting. Now's the time to take a breath, check your plan and calm those worries.


Often, being a financial adviser is as much about wrangling client emotions as it is about managing money.
Thanks to a 24/7 news cycle, every event, great or small, seems to bring a fresh wave of worry. Investors get caught up in the headlines of the day — political uncertainty, global unrest and a near-constant stream of economic updates — and they want to know what it means for their portfolios.
For those who are close to retirement — or already there — it feels especially intimidating. Protecting their money is a priority, and they often try to predict what the market will do — or let someone do it for them.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
All this short-term commotion generally means very little. While stocks have been on a record roll, at some point, the market will go down — that’s what it does. But no one can say when it will happen or how far it will drop. You should plan for the possibility, but not in a panic. Because that’s a surefire way to lose money.
Or, as retired Magellan Fund manager Peter Lynch once said: "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves."
Don’t let your emotions get the better of you when it comes to investing.
1. Be patient
Instead of investing in reaction to the news, stick to what feels like a good fit for you. You should have a plan in place that’s built to match your needs, goals and ability to handle risk (both financially and emotionally). If you don’t have a written plan, go get one. If you do and you’re still uneasy, talk to your adviser about getting a review, or go for a second opinion. It might be time to re-evaluate your risk tolerance. But don’t lose confidence in carefully structured strategies built for the long term based on one day’s events or the ranting of one TV talking head.
2. Tune out the noise
Or at least turn it down. What’s happening in the moment (think about the election, for example, or Brexit) often seems earth-shattering — and there may be volatility for a few days. But when you look at things over the long term, the picture changes. I’m not saying you shouldn’t pay attention to what’s going on with your investments; you just don’t need to look at what’s happening to them every day. And you can’t automatically assume your investments will be affected by a particular news event.
If you see a change that makes you anxious — something fundamentally different about the way a specific investment is performing, a scandal or a management upheaval, for example — talk to your adviser about your concerns.
3. Be realistic
Rather than trying to time the ups and downs of the market, embrace them. If you have some cash available and there’s a pullback or downturn, you can use it to buy at a bargain rate. Just be sure you have other safe investments — and the time and patience to wait for a rebound. The market never goes up forever, but it doesn’t stay down forever, either. Just look at what’s happened to your portfolio since 2008.
If you find yourself fretting about the future more than you’d like, talk to a financial adviser. Besides setting you up with a plan based on your tolerance for risk, he or she can help you sort through the media hype and separate the rumors from reality.
Kim Franke-Folstad contributed to this article.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Dan Webster originally hails from Rochester, N.Y., and currently resides in Pawleys Island, S.C. He is a Registered Financial Consultant and is a member of the International Association of Registered Financial Consultants and the Financial Planning Association.
-
Ask the Editor — Tax Questions on Inherited IRAs
Ask the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on the rules on inheriting IRAs.
-
I Asked Experts When It's Worth Splurging on Beauty and Skincare — and When You Can Save
Smart Shopping Experts agree that while you don't have to spend three figures on your products, some higher-priced items have value.
-
Retiring Early? This Strategy Cuts Your Income Tax to Zero
When retiring early, married couples can use this little-known (and legitimate) strategy to take a six-figure income every year — tax-free.
-
Ditch the Golf Shoes: Your Retirement Needs a Side Gig
A side gig in retirement can help combat boredom, loneliness and the threat of inflation eroding your savings. And the earlier you start planning, the better.
-
Roth IRA Conversions in the Summer? Why Now May Be the Sweet Spot
Converting now would enable you to spread a possible tax hit over more than one payment while reducing future taxes.
-
A Financial Expert's Three Steps to Becoming Debt-Free (Even in This Economy)
If debt has you spiraling, now is the time to take a few common-sense steps to help knock it down and get it under control.
-
I'm an Insurance Expert: This Is How Your Insurance Protects You While You're on Vacation
Here are three key things to consider about your insurance (auto, property and health) when traveling within the U.S., including coverage for rental cars, personal belongings and medical emergencies.
-
Investing Professionals Agree: Discipline Beats Drama Right Now
Big portfolio adjustments can do more harm than good. Financial experts suggest making thoughtful, strategic moves that fit your long-term goals.
-
'Doing Something' Because of Volatility Can Hurt You: Portfolio Manager Recommends Doing This Instead
Yes, it's hard, but if you tune out the siren song of high-flying sectors, resist acting on impulse and focus on your goals, you and your portfolio could be much better off.
-
Social Security's First Beneficiary Lived to Be 100: Will You?
Ida May Fuller, Social Security's first beneficiary, retired in 1939 and died in 1975. Today, we should all be planning for a retirement that's as long as Ida's.