When you think about the things that can affect your investment outcomes, you might picture the performance of share markets, or maybe how much money you have available to invest.

Have you ever considered how your emotions can play a role? Sometimes, emotions can pull investors off course, even when they have solid plans in place, and know that there may be hurdles to navigate along the way.

Here are a few things to know, that can help stop your emotions taking control.

Emotions are normal

It’s perfectly natural to have an emotional response to falls in markets that you are invested in.

While we might intellectually know that investments can decrease in value, as well as increase, it’s often not nice to see decreases happen in practice.

Acknowledging that your response is normal, and is experienced by many investors, could help you navigate your next steps in a less reactive way.

Try not to let your emotions influence your decision-making

Once you’ve acknowledged those emotions, you might be best to try to put them aside – as much as possible.

Anxiety in downturns or overconfidence when markets are high can drive decisions that, in hindsight, may turn out not to have been suitable.

This can happen in different ways. For example, some investors may feel tempted to move to cash after markets have already fallen, while others may want to take on more risk after a period of strong returns. Some may also feel drawn to investments that have recently performed well, even if they may not fit their original strategy.

Before making a change, it can help to pause and ask what has actually changed. Has your goal changed? Has your timeframe changed? Has your financial situation changed? Or are you mainly responding to recent market movements?

Whatever markets are doing, talk to your adviser. They can help you make suitable investment decisions based on your individual circumstances, investment strategy and financial goals.

Your adviser can help you determine whether a change to your strategy is really required, or whether you just need to look through market noise.

Understand what’s happening

When you can better understand both market movements and your reaction to them, it may help you and your adviser determine what action is appropriate, if any.

Sometimes, it’s just a matter of acknowledging your emotional reaction and letting it pass – all part of your investing journey.

Volatility is part of the investing experience

Long-term investing strategies are almost always designed with the potential for market volatility in mind.

Over time, markets do move around. Understanding what you can expect of your investment over the long term may help you to navigate those ups and downs.

Generally, the returns you get from investing are the payoff for taking risk. How much investment risk you are prepared to accept will form part of your investment strategy.

Want to talk?

If you’d like to talk about any aspect of your investing strategy, including how much volatility you might expect to see in your portfolio, get in touch with the team at SHARE. We’re here to help.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.