“The Cycle Of Market Emotions” is a chart we share during times of heightened volatility as a great reminder that the performance of the markets is cyclical, and emotions tend to be cyclical with it.
We hear people say, “I’ve lost X amount!” when their account’s performance is down. However, it’s so important to remember that while account values fluctuate and may move down, the “losses” are not real until you sell when a portfolio is down.
Let’s use a piece of real estate as an example. If you buy a piece of land for $100,000, if you later get an appraisal which comes back with the property value at $80,000, are you going to try to sell the property or wait for it to appreciate in value again?
At Christian Financial Advisors, our response to the markets’ activity is based on discipline and wisdom. Emotions should not be the deciding factor for investment decisions, and we help guide our clients through the emotions that may come during the fluctuations we are seeing.