FYI: Stocks can deliver strong long-term investment returns. The DJIA, for example, has averaged a 7.3% annual price increase since 1900. But people invest for much shorter time spans, where returns are hugely unpredictable. In any given year, the DJIA return is four times more likely to be less than half or more than double its long-term average than to fall within that range.
Such high volatility turns investing into a stomach-churning rollercoaster, and investors respond with unhealthy responses that sabotage their results. To prevent them, they should concentrate on avoiding the onset of stress rather than on learning how to deal with it.
It is well known that people dislike losses much more acutely than they enjoy gains. That’s a big reason why, after a big loss, they dump stocks and stay away well past the end of the rout. A big recovery will have to take place before they feel safe enough to return, and by then much of the upside will have already happened.
Regards,
Ted
https://www.forbes.com/sites/raulelizalde/2019/06/13/emotions-will-torpedo-your-investments-but-you-cant-avoid-them-heres-what-can-work-instead/?ss=etfs-mutualfunds#3d658d041c9f
