Emotion often plays a major role in investment decisions. The following charts show emotional responses that an investor might experience during a typical market cycle, as their account value rises and falls.
The Investing Emotional Rollercoaster
This chart shows the emotional highs and lows experienced over the course of a typical market cycle. A common mistake is to make decisions based on these emotions - to buy when markets are "hot" and to sell when they are declining. However, such behavior can result in a setback to saving for your retirement. Instead, not acting on the emotions and riding out the market cycle may be a good strategy.
Reducing the Investing Emotional Extremes
By staying focused on your long-term retirement goals, you may reduce the peaks and valleys of investing. Following some simple strategies may help you cope with market uncertainty:
- Stay the course
- Invest for the long-term
- Diversify your portfolio
- Keep contributing
With a little knowledge and planning, emotions may be better managed and the impacts of uncertain markets may be reduced.
For complete information about a particular investment option, please read the fund prospectus. You should carefully consider the objectives, risks, charges and expenses before investing. The prospectus contains this and other important information about the investment option and investment company. Please read the prospectus carefully before you invest or send money. Prospectus may only be available in English.
John Hancock Life Insurance Company (U.S.A.) (John Hancock USA), John Hancock Life Insurance Company of New York (John Hancock New York), and John Hancock Retirement Plan Services, LLC are collectively referred to as “John Hancock”.
There is no guarantee that any investment strategy will achieve its objectives.
The content of this document is for general information only and is believed to be accurate and reliable as of posting date but may be subject to change. John Hancock does not provide investment, tax or legal advice. Please consult your own independent advisor as to any investment, tax, or legal statements made herein.
It is your responsibility to select and monitor your investment options to meet your retirement objectives. You might want to review your investment strategy at least annually. You may also want to consult your own independent investment or tax advisor or legal counsel.
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