Here’s how to manage your emotions while investing through the pandemic

Here's how to manage your emotions while investing through the pandemic  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  VIEW IN BROWSER | SUBSCRIBE WED, SEP 30, 2020 YOUR WEALTH Editor's Note Let's face it, life isn't normal. The pandemic has impacted our lives in every possible way and that includes our investment decisions. The volatility in the stock market due to the Covid-19 pandemic has created a range of emotions, including fear, anxiety and helplessness. We all know that keeping emotions out of the investment equation is key to success. However, it's been difficult for many people to follow that age-old advice in these surreal times. While emotional reactions to market events are normal, it's worth a reminder that countless behavioral finance research has shown time and again that investor biases and emotions often cause significant damage to an investment portfolio. The rational side of investing says you should buy low and sell high. Sounds simply enough. However, a natural instinct is to flee the market when it starts to plummet. On the flip side, the greedy emotion prompts investors to get back in when stocks are taking off. It's fair to say that both of these actions can have a negative impact on your investment strategy and those long-term goals. So, what's the difference between investment success and a shortfall during these crazy times? It comes down to creating and sticking to a thoughtfully constructed investment plan. That plan needs to take into account your risk tolerance and short- and long-term financial goals. And financial experts will always point out it's essential to maintain a long-term perspective, especially when markets are declining. History will show that while stocks rise and fall in the short term, they will always reward investors over the long haul. The emotional side, meanwhile, is quite the opposite. That behavior in times of fear doesn't always lead us to being a successful investor. Smart investing means overcoming those sometimes powerful emotions. It means focusing strong data and research and sticking with a proven investment strategy. 2020 CNBC Financial Advisor Summit | October 20: The CNBC FA Summit will bring together the country's top advisory firms to explore the state of markets. Join other forward-thinking advisors to hear from financial industry heavyweights and discover new and innovative ways to address the increasingly complex needs of your clients. Learn More For more key stuff like this, please follow me on Twitter @jimpavia and check out CNBC's Financial Advisor Hub and CNBC + Acorns Invest in You: Ready. Set. Grow. Jim Pavia @JIMPAVIA Here's how to manage your emotions while investing through the pandemic With the fate of the fall semester still uncertain, families are more aware of college refund policies than ever before. Here's how to get yours before it's too late. Tuition refund deadline approaches at many colleges — here's what happens next With the fate of the fall semester still uncertain, families are more aware of college refund policies than ever before. Here's how to get yours before it's too late. Congressional lawmakers worry Trump's payroll tax deferral will hurt Social Security President Donald Trump signed an executive order in August that will let certain workers put off paying taxes toward Social Security that come out of their paychecks through the end of the year. Some lawmakers and advocates see it as an attack on the program. Home prices rose 4.8% in July, according to Case-Shiller index Strong demand from homebuyers in July, coupled with rock-bottom mortgage interest rates, caused home prices to accelerate in major markets across the nation. A Democratic sweep could hit market initially, but effect likely to be short-lived, Goldman says Goldman said the stock market would only see a modest impact in a blue-wave scenario. Op-ed: The pandemic has forced firms to offer early retirement plans. Here's what to consider before you decide to pack it in Amid the pandemic downturn, some firms are offering early retirement to executives as part of efforts aimed at sparing the jobs of younger and less well paid employees. For corporate executives staring at a possible early and unexpected retirement, here are some recommendations to determine if the package you've been offered is the right one for you. The best rewards credit cards of September 2020 We analyzed 111 rewards credit cards using an average American's annual spending budget and digging into each card's perks and drawbacks to find the best of the best based on your consumer habits. 6 retirement-planning mistakes to avoid when you are in your 60s By the time you reach your 60s, you'll need to figure out when you want to retire and how you can make that happen. The Suburban Housing Boom is Just Getting Started "Because the boom in suburban real estate was going to happen, beginning this year, pandemic or not. And it could have legs for years..." CONTRIBUTORS Sharon Epperson @sharon_epperson Josh Brown @ReformedBroker Unsubscribe Manage Newsletters Terms of Service Join the CNBC Panel   Digital Products Feedback Privacy Policy CNBC Events   © 2020 CNBC LLC. All rights reserved. A property of NBCUniversal. 900 Sylvan Avenue, Englewood Cliffs, NJ 07632 Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis. Data also provided by THOMSON REUTERS