Jack Bogle: How to Control Your Emotions in Investments

Credit: CC0 Public Domain

Stock traders make decisions based on psychological factors, including emotions, and may place undue weight on specific information at the expense of other relevant data.

Different emotional states can have unpredictable effects on decision-making at different times.

Recent research shows that emotional input, the “mood” of the market, tends to drive day-to-day market swings.

But the facts, the real data on things like company earnings and GDP trajectory—those tend to be the engine behind long-term investment returns.

Although everyone knows emotion can hurt investment return, it doesn’t make it easy to resist those emotions while in the grip of a stock market correction or bear market.

Avoiding emotional investor behavior starts with a mindset shift.

Having an investment plan and sticking to it is the best course of action to avoid the sway of emotion in trading.

In this video, Jack Bogle talked about how to control emotions and avoid dangerous emotional decisions in investments.

Warning: This video is to show you John Bogle’s view about emotions in investments. Please do your research before doing any investment. A good balance between return and risk is the key to investment success.

Source: Finance Jane (Shared via CC-BY)