I was talking to a loved one on the weekend about investing. He has a friend who had a solid investment plan. He stuck to that plan for the past five or so years and did well.
Then the stock market tanked. And tanked. And tanked.
Yes, the market going down was in his plan but he forgot that fact. He panicked. He sold. He tried to make up losses by speculating. He did wild and crazy things because he was stressed out and worried.
He lost money. Big time. He's at the point of bankruptcy.
Honestly, this is the reason I have a financial advisor. I can draft my own financial plan. I can figure out what to buy and sell. But I can't seem to control my own emotions. I need a rational person to bring me back to my plan, to remind me that the downturns are built into it, that this too shall pass.
Because if I don't, I start to trade on emotion and that ain't investing, it is gambling.