How to Keep Headlines From Driving Your Portfolio Decisions


Investor-UpdateBig, unexpected events commonly trigger strong emotional reactions. The wiring in our brains triggers us to quickly respond to new stimuli. The initial course of action is often the wrong one when we’re not in physical danger. This is particularly the case when it comes to managing our portfolios, which is why I’m sending this week’s commentary out a day early.

Long-term investing success comes in large part from simply sticking to a plan no matter what is going on around you. This is far easier said than done when big events occur. Our desire to do something conflicts directly with what is best for achieving our long-term financial goals.

So, I’m not going to tell you those of you feeling a strong emotional response to yesterday’s election to not do anything. Rather, I want you to act. Take a deep breath. Turn off the television and go for a walk. Read a good book that has nothing to do with investing, such as “Proof: The Science of Booze” (Houghton Mifflin Harcourt, 2014). Do something that does not involve thinking about politics or the market. After the past several months of campaigning, the break will do you some good.

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