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.
Get Kiplinger Today newsletter — free
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.
-
5 Low-Cost Ways to Protect Against Identity Theft
SPONSORED Stay ahead of identity thieves and maintain your peace of mind with these simple, affordable steps.
-
Upgrades to the CBP Entry Process Ahead of Peak Summer Travel Could Streamline U.S. Border Entry for Travelers
Enhanced processing could make international travel into the U.S. smoother and easier this summer.
-
A Financial Adviser's Defense of Annuities: They're Just Misunderstood
Annuities can offer retirement income stability and security against market volatility, though some do have drawbacks. The key is to understand their features before buying.
-
Diversification: An Investment Adviser's Guide to Why You Need It and How to Achieve It
How confident are you that your money will go the distance? Building a balanced portfolio can shore up your investments' long-term stability.
-
How My Dad Taught Me the Compounding Returns of Fatherhood
As Father's Day approaches, I remember how my father's small acts of love and generosity added up over time and influenced my relationships with my own children, proving that the best investments can grow across generations.
-
Financial Professional's Key to Peace of Mind in Retirement: Income Planning
Creating guaranteed income sources in retirement will help you truly enjoy your golden years and spend less time worrying about money.
-
Don't Let a Market Crash Crush Your Retirement
It's a comfort to know that with the right strategies, you can weather just about anything a crazy stock market can throw at you.
-
Wealth Advisers: In Estate Planning, the End Is Just the Beginning
We need to keep the lines of communication with our clients open so that we can anticipate and help them navigate issues that arise over time.
-
Stood Up by a Radio Show: But Was It a Breach of Contract?
A conscientious financial planner reschedules his clients after being invited onto a talk show and ends up losing one of them at a cost of $5,000. What does the radio show owe him, if anything?
-
Eight Estate Planning Steps to Protect Your Loved Ones (and Your Legacy)
Two-thirds of Americans don't have an estate plan. If you're one of them, these are the essential steps to take now to prevent problems for your family later.