How to avoid emotional investing

Tips to help you stay focused on the big picture

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A long-term investment plan is the key to a successful retirement. It requires a disciplined approach because when ​​​​​​​the value of your investments is in flux – and it almost always will be – it’s hard not to let your emotional side take over.

When markets are falling and your investments decrease in value, you may become anxious, or worry about what impact it will have on your overall financial well-being (and consequently your retirement). And when markets take a turn the other way and start climbing, you may become a bit over-confident, willing to take on more risk to see your assets grow further.

These emotions are entirely understandable but acting on them in your investment portfolio can be detrimental.

So, how do I deal with this?

As difficult as it may be to watch the value of your portfolio decline, try to think of the long-term implications and remain calm. Here are a few suggestions:

Many advisors have been through multiple market cycles and have seen difficult periods before. Having an objective advisor who can share their expertise and provide you with advice during difficult times can be extremely important in keeping your plan on track.

Talk to your financial advisor about your retirement goals.


This information has been provided by RBC Global Asset Management Inc. (RBC GAM) and is for informational purposes only. It is not intended to provide legal, accounting, tax, investment, financial or other advice and such information should not be relied upon for providing such advice. The information contained herein is from sources believed to be reliable, but accuracy cannot be guaranteed. Please consult your advisor and read the prospectus or Fund Facts document before investing. There may be commissions, trailing commissions, management fees and expenses associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. RBC Funds, BlueBay Funds and PH&N Funds are offered by RBC Global Asset Management Inc. and distributed through authorized dealers.

® / ™ Trademark(s) of Royal Bank of Canada. Used under licence. © RBC Global Asset Management Inc. 2017

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