Summary
I am concerned about a segment of the investor population that could be deeply affected by our recent economic crisis. I am afraid a percentage of generally financial responsible people will either freeze up and do nothing, or overreact and make bad, irrevocable decisions.
I tend to believe the investor who freezes up, or suffers investor paralysis, may be better off than those who make rash investment decisions. That being said, we don't want to be frozen for too long. Paralysis implies the investor will not make radical changes to their portfolio during down markets. If their portfolio was well diversified, well managed, and appropriately allocated to meet their financial goals before the crisis occurred, the portfolio should weather a down market reasonably well.See the full content of this document
Extract
Stock Market Paralysis and Bad Decisions
Some investors prefer denial in a rapidly declining financial market; they may avoid looking at their statements. Financial advisors do not promote the idea of avoiding financial statements. However, for a small few, staying away from the potential negative emotion of witnes...
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