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Don’t let emotions cloud your investing strategy

April 27, 2017

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Don’t let emotions cloud your investing strategy

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In the Trump era of fake news and seesawing headlines about possible trade wars and tax cuts, one rule sticks out for us: don’t let your emotions decide for you when you’re investing.

That theme also came through loud and clear in a recent interview with David Israelson for the Globe & Mail. We were talking last week about what’s going on in the American economy. Sure, Americans (and people around the world) are sharply divided about Donald Trump. But he’s not the whole story.

Emotions should not trump an analytical approach to investing

Talking about important market forces such as energy and technology? Important facts were already in play before the world’s most famous (or infamous) politician was even elected. Here’s what I had to say about that:

“The U.S. economy remains one of the strongest in the world and continues to improve,” says Chris Nicola, co-founder, and chief technology officer at WealthBar, a robo-adviser service headquartered in Vancouver.

“Also, they are still leaders in technology and innovation. We’re not convinced the Trump presidency will negatively impact on the markets. While President Trump’s immigration policies are negative, other policies are pro-business or aimed at improving the U.S. position in trade deals,” Mr. Nicola says.

However individual investors feel about Trump, it’s important to keep those big-picture elements in mind. Take a long-term view when it comes to the US and individual markets. Don’t let emotion get in the way.

That means investors ought to stay diversified broadly in their portfolios. They should also recognize that timing individual markets is really, really hard.

It’s far better to take a more balanced and thoughtful approach to invest. Diversify to mitigate risk and rebalance your portfolio. Ensure you’re taking advantage of a tried-and-trusted investment strategy: buy low, sell high. Of course, if you are investing with WealthBar, we’re already doing that for you.

Bonus: On a related note, learn what my co-founder and CEO Tea Nicola had so say on this topic while discussing returns and investment strategies.

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