Investors have been challenged like never before in 2020 as the pandemic took the market from the record highs that marked the start of the year, to the brink of a depression by the end of March, and back to record highs.
And if daily headlines about Covid-19 and its economic impact weren’t enough, many investors are grappling with conflicting emotions: boredom and anxiety, hope and fear, gratitude and guilt. These emotions can be particularly debilitating to retirement savers, whose decisions today can have a lasting impact on their ability to amass enough for a decadeslong retirement.
It can be difficult to make sound, emotion-free investment decisions in even the most typical of times, but the environment today could be a case study in bad behavior. “We are just constantly stressed in a way that we’re not used to, and in an environment that is so uncertain and ambiguous,” says Maria Konnikova, an author with Ph.D. in psychology who specializes in decision making.