We like to believe that we are rational and make decisions based on facts. But it can be difficult not to let emotions govern your investment decisions – especially when you feel anxious during sell-offs and in times of market volatility. And behavioural economists have identified hundreds of psychological biases that can influence the way we make decisions about our finances.
But there are some investment mistakes that you should try to avoid making, particularly in current market conditions, as set out below. Also take time to reflect on your own temperament, and propensity to over- or underreact in times of stress, so that you can think about what mistakes you personally might be most susceptible to making.