Are you tempted to sell your investments as markets go down, or perhaps losing sleep over your financial statements? Is too much information causing you stress? Do you constantly check your portfolio returns?
Use the interactive wheel below to learn how staying calm by checking less could help keep your emotions under control.
Rotate the wheel to see the emotional results of checking your investments too often!
Your chance is % to see a gain
That’s roughly a good-to-bad ratio
Typically this is how you feel
Because you gain Units of Emotion*
While you lose Units of Emotion
*Prospect Theory states that for every good result a person sees, 1 Unit of Emotion is gained. But when a bad result is seen, 2 Units are lost since a loss has twice the impact. Excessive checking can therefore lead to stress, leading to poor decisions. You might even end up abandoning a good-performing investment. The figures above are based on the book Fooled by Randomness: The Hidden Role of Chance in the Markets and in Life by Nassim Nicholas Taleb.
