www.insideHALTON.com | OAKVILLE BEAVER | Thursday, March 3, 2016 | 30 T Emotional decisions lead to losses; invest for the long term he more you worry about losing money, the more often it happens. Most often, the stock market sleeps. Small gains and small losses and the bottom line is not much happens. Then the market awakes and all bets are off. Volatility brings out the worst in investors. Markets, today, are very volatile and therefore more people will be making mistakes. Recent research from Rui Yao, an associate professor of personal nance at the University of Missouri, concluded people are "more Dollars & Sense Peter Watson Guest Contributor likely to make investment mistakes during a down market." Investors that have an aversion to losses are most likely to incur losses. The main problem is converting nancial assets into cash during a down market. Yao said people go to cash to avoid losses, but when they sell, values have already declined and they don't buy back until values have increased. That is exactly backwards. If your portfolio has declined in value then you have already incurred the loss. Selling now does not erase your loss. Selling means you will not participate in future gains when the markets recover their value. Stock markets rise and fall. It is nancially disastrous to participate in a stock market decline and not have the discipline to remain invested so you can also participate when markets rebound. The theory is to buy low and sell high; however, human behaviour is our worst enemy. We do things backwards. Yao based her research on the 2008 nancial crisis by studying nancial transaction data. She said "the real mistake is being inconsistent." see Managing on p.32 Your legs will thank you! Compression soCks... AyA Kitchens of oAKville 1195 north service roAd west 905.847.1522 Oakville Burlington 380 Dundas St. E. 3350 Fairview St. T: 905.257.4335 T: 905.637.4335 ayaoakville.com Join us at our OPEN HOUSE EVENTS MARCH 12 9:30 am 12:30 pm Institute for Applied Health Sciences at McMaster Health Sciences Programs SATURDAY 10:00 am 1:00 pm Fennell Campus All Programs APRIL 2 SATURDAY 5:30 pm 8:30 pm Stoney Creek Campus Skilled Trades and Apprenticeship Programs APRIL 7 THURSDAY OPEN HOUSE CONTEST ENTER THE post using `I'm heading to the #MohawkOpenHouse' Find out more at mohawkcollege.ca/openhouse #1 COLLEGE in the Greater Toronto and Hamilton Area for 5 YEARS IN A ROW! * *2014-2015 Student Key Performance Indicator (KPI) Student Satisfaction Survey. Read more at mohawkcollege.ca/kpi