It’s simply a natural psychological reaction to get more pessimistic on the way down and more optimistic on the way up.
Yet, letting those impulses translate to big shifts in your portfolio may result in taking too much risk near a top and being too conservative near a bottom.
In addition, I always find it helpful to tune out the noise of the financial pundits who thrive on this emotional roller coaster.
They don’t know anything more than you do with respect to where the market is headed and they certainly don’t know anything about your personal needs.
You should be working with an advisor or managing your own portfolio with well-defined parameters that relate to your specific situation.
This article is brought to you courtesy of David Fabian.