Would you be surprised to learn that the costliest investment mistakes are often made as a result of our emotions? You see, the reasons for markets going down are always different, but the emotions we have as investors are always the same. Fear, panic, and an inclination to protect against loss tend to take the lead when prices dip. There is little else that can worry us more than our money, so it’s only natural to feel this way. We begin asking questions like:
When will the declines stop?, Is there anything I can do to protect against loss?, How will this affect my near and long-term financial plans?