Title: How to Avoid Emotional Investing
Headings: How to Avoid Emotional Investing
How to Avoid Emotional Investing
Key Takeaways
Performance Chasing Can Cost You
Investor Behavior
Bull vs. Bear Markets
Bad Timing
Time-Tested Theory
Strategies to Take the Emotion Out of Investing
$6.2 Trillion
Frequently Asked Questions
Why are emotions so important to market psychology?
How can one measure the level of fear or greed in the stock market?
What are some trading strategies to keep emotions in check?
The Bottom Line

Content: Staying the course through short-term volatility is often the key to longer-term success as an investor. 0:41
Performance Chasing Can Cost You
Investor Behavior
Investor behavior has been the focus of many studies and numerous theories attempt to explain the regret or overreaction that buyers and sellers often experience when it comes to money. The reality is that the investor's psyche can overpower rational thinking during times of stress, whether that stress is a result of euphoria or panic. Taking a rational and realistic approach to investing—during what seems like a short time frame for capitalizing on euphoria or fearful market developments—is essential. The non-professional investor is typically putting hard-earned cash in investments for the sake of receiving a return. Still, they see their investments lose value due to market developments at times. The losses can cause stress and second-guessing. That is, many investors have a relatively low risk tolerance when it comes to investing because losing money is painful. But risk can be viewed as a guidepost for investing and investor behavior. Investors who enter into investments with a base level understanding of the risks involved can mitigate a great deal of the emotion associated with investing.