Market Response, Impulse, Emergency Money and Bad Investing

Mistakes in the recession

Responses to the market collapse, investing impulsively, emergency money, and bad investing make up the top regrets of the recession. Consumers are weighing in on how well they fared throughout the recession on each one and learning lessons from their responses. Now that the recession is considered to be over, it's a good time for everyone to reflect on what not to do in times of financial strain.

Responding to the market collapse

A lot of consumers panicked when they heard that the recession was coming. According to Dan Ariely, a Duke University behavioral economist, "Emotions can cause consumers to act quickly in times of stress. Many people sold stocks during the recession… their immediate reaction was to 'get out.' It's understandable, but there are better ways to manage." Ariely says that he purposely avoided checking the Dow's plunge to stop himself from impulse-fueled activities. Many experts suggest that watching the market like a hawk in times of financial strain only creates panic. It's a better idea to set up safeguards, such as automatic emails if a stock falls below a certain level, but other than that, consistently obsessing over investments is pointless. It only creates more stress and that can cause impulse reactions. … click here to read the rest of the article titled “Market Response, Impulse, Emergency Money and Bad Investing“