COVID-19: It has been an Emotional Rollercoaster

It is hard to believe that the first COVID-19 case in Australia was over 14 months ago, on 25th January 2020. Since then, there have been 29,240 confirmed cases in Australia, compared with over 131,000,000 worldwide. The ups and downs we have all had to endure, some obviously more than others, has taken both a physical and emotional toll.

 

As governments scrambled to contain the spread of coronavirus, we have seen see-sawing lockdowns and border closures. Just last week, Queenslanders went from frustration to relief, all in under three days, when the Premier declared Easter being ‘Good to Go,’ lifting the 3-day lockdown at midday, the day before Good Friday.

 

Not surprisingly, the emotional rollercoaster ride being COVID-19, is also prevalent with investing. As humans, we tend to follow our short-term instincts and relate what is happening around us to investing.

 

Allowing emotions to dictate your investment decisions is a sure way to lose money. People tend to buy at the top and sell at the bottom of the market – BUY ON GREED and SELL ON FEAR!

 

 

The brain “likes” emotional information, both positive and negative. That’s why emotional memories are so vivid. Your brain stores, and instantly recalls, powerful emotional experiences. That’s why you can forget where you put your glasses ten minutes ago but vividly recall your high school formal.

 

Reacting to negative share market movements during the initial COVID outbreak in February and March 2020 is entirely understandable. However, it would have been exactly the wrong decision. The Australian share market has gained investors in excess 30% since its lows in March 2020, with the global share markets performing similarly.

 

By taking emotions out of investing, all you need to do is to have a plan, stay disciplined and be willing to give your investments time. If you are feeling your emotions getting the better of you during these uncertain times, please reach out to an Alman Partners adviser.

 

Jason Kirk (CFP® Professional, SMSF Specialist Adviser, GradDip. App.Fin&Inv, B.Econ) is a representative of Alman Partners Pty Ltd, Australian Financial Services Licence No: 222107.

Note: This material is provided for information only. No account has been taken of the objectives, financial situation or needs of any particular person or entity. Accordingly, to the extent that this material may constitute general financial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation and needs. This is not an offer or recommendation to buy or sell securities or other financial products, nor a solicitation for deposits or other business, whether directly or indirectly.

 

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