HOW TO MANAGE LOSS AVERSION
Instead of avoiding potential risk altogether, here are a few tips to help you safely
bet your cards.
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Think long-term: When it comes to juggling risk, long
term investments are a safer bet than short term
investments. If the market dips with a long-term
investment, it has a longer time to bounce back. If the
market dips with a short-term investment, you might
be feeling the pain of loss.
Avoid short-term news: Often, short-term news can
suggest the potential for bad news to occur with
investments. Acting on this news can stir up
emotional, quick decisions to occur, which may not be
beneficial in the long run. Remember that short-term
news tends to lead to short-term, temporary
outcomes. If you can avoid short-term news, you will
be less likely to make quick decisions.
Reassess your risk tolerance (if needed): If you can’t
ignore the short-term news and aren’t comfortable
with your current portfolio, it’s probably time to sit
down with your financial advisor to reassess the risk of
your portfolio and how you can switch it up.
When it comes to making any financial decision, take your time and do your
research. Speak with a financial advisor to safely determine the best investment
decisions for your portfolio.
FLM'2017 | 10