Investing in a crisis: How to keep calm and carry on
Know yourself and your biases, and cultivate your intangible assets too
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Genevieve Cua
MARKET crises bring out the worst in an investor. Today’s environment has the feel of a crisis to it. Stock and bond markets are still down in double digits for the year; inflation is persistent; war drags on; and the Federal Reserve is resolutely hawkish. Based on reports I regularly receive, no strategist has yet called a bottom to equity markets, although bond markets are starting to look attractive.
In my last Mind the Gap column, I wrote about my own regrettable personal investment mistakes. That was far from an exhaustive list. In this column I’d like to look into why it is so challenging to tame our all-too-human urges. There is, to be sure, a way forward – but for many it may well be a lifelong struggle.
Depending on the magnitude of losses and one’s relative wealth, investment losses may count among life’s most painful experiences. Some people lapse into depression, and surfacing from this is not unlike recovering from grief.
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