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Resisting the emotional roller coaster: How to stay focused on long-term goals

by | Jul 1, 2022

There will always be events that cause ups and downs in the financial markets — and for many, it’s easy to overreact to short-term news.

It’s important to remember, however, that historically, markets have always rallied and gone on to reach new heights.


Four tips to help you resist the emotional roller coaster

1. Get invested

When it comes to investing, what’s the most significant risk an investor may face? For many investors, the biggest risk is, quite fundamentally, the risk of losing money. However, choosing when to invest, or “time” the market, is difficult. Individuals who attempt market-timing strategies have historically underperformed those who get invested and stay invested through the market’s ups and downs.

2. Keep goals in mind

Staying goal-focused can serve you well in all market conditions. Evidence shows that investors focused on goals — as opposed to returns — are more likely to stick with a strategy. And sticking with that strategy is key to goal achievement.

3. Manage behaviour

When markets move through their cycles, we recommend avoiding getting caught in emotional highs and lows. The best course for most long-term investors is to change strategy only when personal circumstances change, not when the market changes. Today’s headlines may cause concern for investors. It is the role of the adviser to ensure investments remain positioned appropriately despite any worry.

4. Stay the course

The importance of staying in the market, despite volatility, is demonstrated by how investments recovered from the market turbulence surrounding the 2020 pandemic. While it may make an investor feel uneasy to remain in the market, historically down markets rebound within a fairly short period of time.

Markets do go down, but they also always recover.

The important thing to remember is the only way you may take advantage of a rise in the market is if you are in the market. GSI’s portfolio solutions are designed to manage investment risk, limit volatility, and help maximise returns in a variety of market conditions. Contact GSI to learn more.

The views and opinions in this document are from GSI only and are subject to change. They should not be construed as investment advice.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any stock, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts.

The value of an investment and any income from it can go down as well as up. Investors may get back less than the original amount invested. Returns may increase or decrease because of currency fluctuations. In addition to the normal risks associated with equity investing, international investments may involve risk of capital loss from unfavourable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Bonds and bond funds are subject to interest rate risk and will decline in value as interest rates rise. High yield bonds involve greater risks of default or downgrade and are more volatile than investment grade securities, due to the speculative nature of their investments. Narrowly focused investments and smaller companies typically exhibit higher volatility. Diversification does not ensure a profit or guarantee against a loss.

Whilst considerable care has been taken to ensure the information contained within this document is accurate and up-to-date, no warranty is given as to the accuracy or completeness of any information and no liability is accepted for any errors or omissions in such information or any action taken on the basis of this information. Data refers to past performance. Past performance is not a reliable indicator of future results.


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