Emotional investing: what is it and how you can avoid it

Are you an emotional investor? Your feelings could be damaging your long-term investments, but here's how to stay rational when the markets are turbulent.

Anxious-looking financial advisor rubbing eyes while working over laptop and analyzing reports at desk
(Image credit: Moon Safari via Getty Images)

Whether it’s fear, anxiety or excitement, the chances are we’ve all let our emotions take over when it comes to making investment decisions.

But understanding when you’re acting emotionally and limiting the impact it has on your portfolio is key to long-term success, especially during periods of market volatility.

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Header Cell - Column 0

UK

US

Germany

Australia

France

Spain

Italy

Netherlands

Fear of loss

37%

43%

41%

37%

42%

46%

61%

35%

Optimism

36%

35%

34%

35%

24%

31%

20%

29%

Excitement

20%

22%

16%

23%

11%

14%

12%

17%

Impatience

13%

17%

25%

17%

14%

21%

18%

21%

Overconfidence

15%

15%

9%

15%

13%

23%

17%

16%

Greed

10%

12%

11%

13%

41%

11%

8%

11%

Panic

12%

14%

12%

13%

9%

10%

9%

10%

Fear of Missing Out

13%

14%

6%

19%

5%

15%

7%

11%

Dan McEvoy
Senior Writer

Dan is a financial journalist who, prior to joining MoneyWeek, spent five years writing for OPTO, an investment magazine focused on growth and technology stocks, ETFs and thematic investing.

Before becoming a writer, Dan spent six years working in talent acquisition in the tech sector, including for credit scoring start-up ClearScore where he first developed an interest in personal finance.

Dan studied Social Anthropology and Management at Sidney Sussex College and the Judge Business School, Cambridge University. Outside finance, he also enjoys travel writing, and has edited two published travel books.