Half of investors admit impulsive decisions and go on to regret it

7th April 2022

Whether you are excited about investing or anxious about market volatility, keeping your emotions in check can help you to make better investment decisions. Half of investors admit impulsive decisions and go on to regret it, according to research from Barclays. While it can seem exciting at the time, a substantial 67% go on to regret their decisions.

Short-term market volatility can often play a part in spontaneous decision making. When asked what influenced their investment decisions, social media topped the list, with a third of investors citing it as a factor, closely followed by friends and the fear of missing out. It’s important to keep in mind how reliable the information is and how it relates to your circumstances. So, while a friend may have made an investment decision that’s right for them, it doesn’t automatically mean it makes sense for you too. It’s important to keep in mind how reliable the information is and how it relates to your circumstances.

Emotions including excitement, impatience and fear are key roles that play in impulsive behaviour. Letting these factors play a significant role in your decision making can disrupt your financial plan.

Recognise when emotions are affecting your thought process.
Keep in mind how reliable the information is and how it relates to your circumstances.
Taking a step back before you make an investment decision.
Have confidence in your financial plan. Remember to look at opportunities objectively and see how they fit into your long-term goals.
Invest with a long-term outlook, don’t allow short-term market movements to create knee-jerk reactions. Reacting to short-term falls could mean you miss out on long-term gains.
If you are making changes to your portfolio, ensure these are based on factual information, rather than emotions.

Half of investors admit impulsive decisions and go on to regret it but working with an Independent Financial Adviser can help give you confidence in your financial plan. It also means you have someone to talk to if you’re thinking about making changes to your investment strategy, whether based on emotions or other factors.