Ego and emotions are the enemies of sound investment decisions

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Emotions, especially fear and greed, should never be part of making investment decisions that are meant to build your future or provide a legacy for your loved ones.

People typically experience several emotions when making investments, says John Manyike, Head of Financial Education at Old Mutual. Typically investors begin feeling confident about their investment. Later, they may fear that they have not made the correct decision and, as market conditions and interest rates improve, can find themselves feeling optimistic about their choices.

Relying on friends or family for investment advice. Most people have views on investment, and their opinions may not be that well informed. When you need advice, seek out a professional. “Being a good investor means making sure that you have the knowledge you need. You must be able to set savings goals and then find the products that will help you achieve your objectives. This means setting emotional investing behaviours to one side and getting advice from professionals.”

 

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