How to understand and control emotions when investing

When it comes to investing, our emotions are both a blessing and a curse. Emotions in share investing are often referred to as animal spirits and that about sums it up. No matter how much we rationalise and make plans, when it comes to our own money, no one likes to see a paper loss (shares have dropped since purchase) and all of us love to see a paper profit (shares have risen since purchase).

Some of you will be better at managing your emotions than others, but even the best find sharemarket sell-offs unpleasant. The same can be said for that little knot in the stomach that arrives when share prices rally really quickly. There is always a niggling doubt, when will this end?

So, let’s run through some of the emotions that you need to consider and try to manage.

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