Funds Focus

Why do we sit on failing investments?
Two years ago (Psychology of Investment), I discussed the psychology of our investment decisions and why we have a psychological predisposition to buy when the markets are high and sell when markets are low.
At the time, I felt that my article had addressed the basics of structuring an investment portfolio to avoid the common pitfalls whilst highlighting the emotional attachment that we develop with our own investments and our propensity to avoid loss.

With investors seeing the investment markets moving more in a day than in a whole year, the mental uncertainty this creates means that investors can find themselves sitting in the sidelines watching the window of opportunity pass them by. We find it very easy to throw money at the markets when times are good but are reticent to invest when the market has fallen and prices are low.

I’ve been giving a lot of thought to the psychology of investing and why we have a tendency to repeat the same