Don’t Panic! Tips for Keeping Emotions out of Finance
Keeping Emotions Out of Investing: 4 Tips for Staying Calm & Confident
The emotions about money = security. It’s why we work. It’s why we save. And it’s certainly why we invest.
But when our financial security is on the line, it can be difficult to keep emotions out of the equation. We’re talking about our livelihoods!
The problem is, combining emotions with investments is a recipe for poor decisions. In the realm of investing, poor decisions can lead to costly mistakes — even for the most serious investors.
When we get worried or stressed, emotions can run high. And when that happens, reactive behaviors that were intended to protect us end up doing the opposite — they cloud our judgment. Then we make financial knee-jerk reactions from a heightened emotional state rather than a place of rational thinking and sound strategy.
How to Keep Emotions and Investing Separate
Here are four tips for keeping a cool head and your emotions in check when it comes to your investments.
Tip #1: Big Picture Thinking
Setting financial goals is the first step to successful investing. If you haven’t already, it’s time to strategize with a financial planner.
But beyond that, having goals helps you focus on long-term trends instead of reacting to short-term market fluctuations.
For example, if your goal is to retire in 30 years, you’ll be less rattled by momentary losses, knowing you have time to recover. You’ll also be better able to gauge how comfortable you are with exposure to risk. (Here’s a good place to start understanding your risk tolerance.)
Tip #2: Put Your Phone Away!
It’s natural to be curious about how your portfolio is doing. But obsessively checking the market and your investments daily? That’s a fast track to stress and second-guessing.
You’ll gain far more peace of mind by setting boundaries. Try checking your investments monthly or quarterly — and then let it go. Market moves over a few days or weeks are just noise when you’re investing for decades.
Trust your strategy and give your plan the space to work.
Tip #3: Risky Business — Know Yourself, and Your Investments
Being honest about your own risk tolerance is one side of the coin. The other is understanding what you’re investing in.
Do your due diligence. Make sure the risk levels of any potential investment align with your goals. Know what it is, how it fits into your long-term vision, what risks it poses, and how you’ll exit if needed.
It’s one of the most powerful ways to prevent emotional reactions.
Tip #4: Get Some Help
You don’t have to manage all this alone.
Working with a professional puts a buffer between your emotions and your money. A good financial advisor or portfolio manager offers data-backed objectivity, guidance, and accountability.
They can help you tune out the noise and stay laser-focused on your goals.
Final Thought
If you’re ready to embrace data-driven investing where cooler heads prevail, reach out to us at info@nestfinancial.net.
At NEST Financial, we’re proud to be an Austin-based, boutique wealth management firm helping families, business owners, and individuals align their finances with their big-picture goals. Let Gloria and Sean guide you toward a plan that gives you clarity and confidence.
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DISCLAIMER: The information and opinions shared in this article are for educational purposes only. They are not financial planning or investment advice. For guidance tailored to your unique goals, drop us a line at info@nestfinancial.net.