Feeling emotional about your investments? | American Funds

Market perspective

Feeling emotional about your investments?

Market volatility may have left you feeling ready to cash out of all your investments. But as this clock shows, stock market cycles — ups and downs — often cause investors to do the wrong thing at the wrong time.

  • During periods when equity returns have been relatively high, people have tended to flock to the market — when prices were at their highest.

  • But when equity returns have lagged, many have sold their holdings and left the market — at a time when stock values have been most attractive.

In essence, these investors bought investments at a high price and sold them when their value was low — the opposite of the “buy low, sell high” philosophy.

What you can do:

  • Remember that it’s natural to feel worried

    Even people who are aware of the market’s historical cycles may feel torn between their emotions and knowledge.

  • Follow your head rather than your stomach

    Maintaining a regular investing strategy means you have the opportunity to take advantage of market declines like this one by purchasing more shares for less money.

  • Talk to your financial professional

    Before making any decisions make sure your emotions are in check and talk to your financial professional. Take steps to ensure that your long-term investment strategy stays on track.

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Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional or downloaded and should be read carefully before investing.