Over the last month, we have seen a very nice bounce in the market. But we also anticipate that markets will get turbulent again in the coming months. When the stock market swings, it is easy to get caught up in the day-to-day fluctuations of our investments. We can see these changes in real time with a few clicks on a website, or receive instant notifications via a portfolio managing app.
When we react emotionally to these ups and downs, the emotions that typically rule our decision-making are fear and greed. Fear motivates investors to sell when the going gets tough, and they miss out on long-term gains. Greed can cause investors to make risky, impulsive choices when the market is on the rise to earn a quick profit.