Emotions cost investors dear, research finds

Poor investing decisions driven by emotions cost the average investor 3 percent a year in returns, according to research by Oxford Risk. Emotional decision-making increases during times of market and economic stress, creating even worse returns. For example, a decision to sell stocks when the market lost more than one-third of its value at the beginning of the global coronavirus pandemic could have cost an investor as much as 6 or 7 percent of their yearly returns. To avoid knee-jerk emotional decisions that can cost you, avoid obsessive monitoring of stock prices and the news. In addition, relying on the objective viewpoint of a financial advisor can help. If you have sold out of the market, reinvest gradually over time to avoid losses that could result from mistiming your re-entry.

Financial Times 
Emotions cost investors dear, research finds | Financial Times