The best time to make investment decisions
According to a recent report, important investment decisions are best made when you're feeling happy and such choices are best avoided when upset or stressed. In a study commissioned by Macquarie Bank, major emotional events can negatively affect our judgement causing us to make poor financial decisions. Such circumstances include:
In short, investors need to be aware of their emotional and mental state and take this into account before making financial commitments. If possible, such decisions should be postponed to when you are feeling up beat and positive. However, David Shirlow, head of technical services for Macquarie Financial Services Group, says there are times when decisions must be made – such as sorting out estate planning and superannuation issues – regardless of the investor's state of mind. Mr Shirlow suggests that one option in such circumstances is consulting a professional adviser for objective guidance.
‘Happiness ‘the key' to good investment strategies', The Australian Financial Review Weekend, 6-7/01/01, p 37.