Published by Kerry Meath-Sinkin
You have likely noticed or heard that market volatility has drastically increased over the last couple of weeks. While we knew volatility was on the horizon, it was still a violent downturn, which potentially caused you stress, and anxiety. We know that stress increases the hormone “cortisol” in the body. While this was helpful hundreds of years ago when we had to run from lions or tigers, it is less useful in modern stressful situations.
When it comes to investing, studies show that personal risk preferences fluctuate substantially, and these fluctuations may be linked to this hormone response. Behavioral investing finds that many people will impulsively pull money out when the market drops, yet that can often be the wrong decision.
Seeing a market dip is scary. While your first impulse is to take action and pull your money out, this has proven to be a costly mistake over the years. The sage advice remains simple during these turbulent times. Stay calm and make investment decisions to support your longer term goals. Remember that it is important to be acting from a strategy and plan that you decided on before the volatility hits. Inevitably, reacting to the market with anxiety and stress leads to poor decision making.
Kerry Meath-Sinkin is a registered investment advisor and financial planner based in Minneapolis. She graduated with honors from Brown, and works with clients not only in the Twin Cities, but nationwide. Kerry believes in a holistic approach to finance. She works with her clients to develop a practical plan with their finances, while also working on their inner relationship with money. Together, these aspects allow clients to feel healthy, abundant, and free. Kerry also has a passion for healthy living, is a certified Ayurvedic practitioner, and public health educator. Click here to learn more about Kerry.
