How the market is doing can be a general obsession for investors who’ve reached a certain level. That’s especially true for when you’ve had enough experience to understand what’s going on and how your investments might be affected.
Of course, there’s really nothing wrong with knowing all these. In fact, this information can help empower your decisions on where to put your money and how you might best try to grow it. However, here are some things to keep in mind if you’re at the point where you’re watching too much market activities.
Your goal matters most
Markets rise and fall as part of a natural (and endless) business and economic cycle, and there’s nothing anyone can do except respond to what’s going on. You can take advantage of upswings, and be wary during downswings. However, you have to remember that you’re trying to achieve a certain money goal.
How on-track your investment’s growth is the way you should be measuring the progress of your money’s growth. After all, there’s a chance that it has been increasing the way you expect (and need) it to, even if the market is in a downturn and many investment products aren’t doing well.
Slower market growth might still allow you to achieve your goal if you can give your investment a little more time. Having patience and buying yourself a little more time can be beneficial if you reach the part of the cycle when things start picking up and your money grows a little faster compared to previous months.
Avoiding bad decisions
The danger with paying too much attention to how the market is doing is that it may lead you to make investing decisions that aren’t suitable for your portfolio. This goes for the times in which conditions are slowing growth and for when growth is going faster than you expected.
Succumbing to excessive emotions – whether excitement or fear – can trigger reactions that can make you put in more money than you were planning to, or to get you to pull your cash and miss on great opportunities altogether.
That’s why having a plan and sticking to it is so important. After all, following pre-made decisions is easier than having to figure out your next move, especially when it might be difficult to keep a level head.
At the end of the day, you’re investing for a purpose. As long as you’re likely to achieve it by the time you need it, how the market is doing isn’t very important.
Always keep in mind that we are, by default, emotional beings. Knowing so, it’s best that we keep our emotions in check and be rational when it comes to investment decisions. This is where having plans and sticking to those plans come in handy.
