Following my previous post from last week, being aware of the emotions you are experiencing will help you maintain your focus on the bigger picture.

Are you feeling anger, fear, apathy, distress or turmoil? If so, there’s a good chance that they are affecting your decisions in regard to day-to-day life and your financial situation.

Focusing on short-term prices can lead to bad choices.

But, while a longer-term focus can help, it’s not always clear how to create that focus, particularly in times of volatility. So it’s important to slow down and reconnect with your long-term goals. Understanding behavioural science and how emotion affects your outlook is the key to managing stress and decisions. An experienced, knowledgeable financial adviser will be able to help you work through these issues.

Identifying your emotions and what is causing them, will also help you recognise where your behaviours come from, as well as where your bias sits. Often investors don’t realise that their investing decisions are impacted by their emotions. When times are difficult, this is something that financial advisers can help you in dealing with a volatile market.

‘We can’t completely erase our biases, but we can find ways to accommodate (them) when it comes to investing decisions. Instead of trying to suppress our biases, we can harness those emotions and rename them.’[1]

These are challenges we all face, particularly at the moment. Understanding the psychology behind your emotions, reactions and behaviour goes a long way to managing turmoil and stress and preventing bias from affecting your judgement.

‘Logical investing decisions should be made based on the quality and value of the investment, not just price.’[2]

Remember that every day is a gift and there are many things in our lives to be grateful for.

[1] https://spotlight.morningstarhub.com.au/a-behavioral-guide-to-market-volatility-how-behavioral-science-can-help-advisers-during-market turmoil/?utm_source=eloqua&utm_medium=email&utm_campaign=none&utm_content=21829