The Investment Roller Coaster

23-02-2021

For most people, investing comes with a strong emotional attachment. If market goes up, it is easy to feel excited. If market goes down, it is even easier to feel frustrated.

However, it brings little benefit to attach ourselves emotionally to our investments. Because when investments go down, it does not necessarily mean a bad result. We actually have the opportunity to buy more of the assets, but now at a lower price.

This follows the classic investment strategy of ‘buy low, sell high’.

This strategy may not work if you are investing with emotions, hence it is so important to be in control of your emotions when investing. So that when the roller coaster happens – and it will happen – you can consider taking this opportunity to buy more instead of selling your investments in panic. If your only response to a falling market is ‘sell, sell, sell’, then perhaps you shouldn’t be in the market.

Eventually over the long-term, the market will go up again (it really will, because it’s a roller coaster!). The risk, however, is that the market could take longer than expected to recover, and you could be forced to sell before that time comes.

Raiz’s automated tools like recurring investments are so powerful because they help to remove the emotion that usually comes with deciding to make an investment, and at the same time allow you to Ringgit Cost Averaging into the market.

 


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Important Information 

The information on this website is general advice only. This means it does not consider any person’s investment objectives, financial situation or investment needs. If you are an investor, you should consult your licensed adviser before acting on any information contained in this article to fully understand the benefits and risk associated with the Raiz product. 

The information on this website is confidential. It must not be reproduced, distributed or disclosed to any other person. The information is based on assumptions or market conditions which change without notice. This will impact the accuracy of the information. 

Under no circumstances is the information to be used by, or presented to, a person for the purposes of deciding about investing in Raiz. 

The past return performance of the Raiz product should not be relied on for deciding to invest in Raiz and is not a good predictor of future performance.

The advertisement has not been reviewed by the SC.