Emotional investments have a bad reputation, and for good reason. They have the power to override rationality and cause you to make irreversible money mistakes. But does investing without emotions really work?

Not really.

Sorry, but you’re a thinking and feeling being! Emotions will always be there to provide useful feedback on your present conditions. That said, if left unchecked, they can cloud your judgment and hurt you in the long run.

Investing is all about the long run. So below, we’ve provided insights into how intense emotions can negatively impact your retirement. You’ll also see the actions you can take to keep your future self on track.

The Feeling of Anxiety/Overwhelm

Anxiety is that knot in your stomach. The one that keeps your mind racing, and your focus on the uncertain. It’s been found that women are far more likely to struggle with anxiety compared to men, and that the United States is a leader in diagnosed cases of anxiety disorder.1 2

How Can Anxiety Hurt Your Investments?

  • Panic Selling: Anxiety can cause you to “cut your losses” by panic selling investments. But all too often, this knee-jerk reaction results in irreparable damage in the form of realized losses, less capital for reinvestment, and long-term opportunity costs.
  • Avoiding Financial Planning: When anxiety hits, it can be difficult to take a transparent look at your finances. You may feel more comfortable in the short-term by remaining in the dark. But this blinds you to the truth of your situation as well as the actions you can take.
  • Over-Diversifying: Anxiety can get you to spread investments too thin in an attempt to reduce risk, leading to an overly diversified portfolio that seriously underperforms in the long run.

How You Can Handle It

+ Brush Up On Market History: Studying market history provides a more objective view of the economy. It shows you volatility is completely normal, and that there’s always been a recovery from past crashes.

+ Get a Thinking Partner: Financial advisors exist for a reason! You may find it useful to have a non-judgemental thinking partner to help examine, understand, and improve your situation.

+ Limit Exposure to Negative Media: Whether it’s high inflation, stock plummets, or massive fraud, the media is always looking to exploit fears. Shutting off the electronics can help lower feelings of anxiety and impulsive overcorrections.

The Feeling of Depression

Depression is the darkness at the end of the tunnel. It’s what makes effort seem pointless, and advocates that you give up completely. Depression too has been found to disproportionately affect women.3

How Can Depression Hurt Your Investments?

  • Capitulation: Being depressed about finances, it can cause you to quit investing altogether. But this is perhaps the worst way to hurt yourself financially.
  • Shopping Addictions: If you’re depressed, spending money to feel better can provide momentary relief. However, these splurges can become addictive, which robs future you of financial security.
  • Lost Opportunity: When there’s an economic depression in the U.S., it opens up powerful opportunities by offering great investments at a heavily-discounted prices. Unfortunately, emotional depression can convince you otherwise and leave you losing out in the long run.

How You Can Handle It

+ Invest in Therapy: Investing in therapy can help you identify root causes of depression and develop the coping strategies necessary to manage it. This in turn can reduce the impact depression’s effects may have on your financial future.

+ Pursuing Passions: Putting more time into hobbies and interests can provide a healthy outlet for emotions and give your mind a much-needed break from the emotional drains of depression. This more balanced mental state may also help you make better financial decisions.

+ Automatic Savings: When saving is automatic, you can keep building retirement momentum even when you’re worn out emotionally.

The Feeling of Exhilaration

Exhilaration is that rush of heart-thumping energy that makes you feel like anything is possible. But even positive emotions need a watchful eye. The exhilaration that can come from a bull market or newfound success can cause you to stop asking the right questions about what it’ll take to create enduring financial freedom.

How Can Exhilaration Hurt Your Investments?

Reckless Spending: If you feel invincible you may start spending that way. Before you know it, you’ve overleveraged yourself. Now the market is taking a dive and there’s no safety net to break your fall.

Following Market Trends Blindly: The excitement and thrill of the market can cause you to blindly follow trends. You may disregard your own research and strategy (or that of a professional’s), which leads to impulsive investments and costly mistakes.

Greed: The disease of “more, more, more!” becomes particularly hard to fight off if you feel like you’re on a hot streak. This can blind you to the progress you’ve made as well as the opportunities to lock in the gains you’ve acquired.

How You Can Handle It

+ Celebrate Responsibly: Learning to enjoy your money responsibility is an important skill. When things are going well, budget for a good time (or multiple), and fully step into your present level of success.

+ Expedite the Right Plan: Newfound success can also shorten the time horizon on pre-established goals. You can use an influx of cash to save more for a college, pay down debt, or make a down payment.

+ Give to Charity: Giving to others is a great way to step outside of yourself. And if there’s a market downturn, you’ll have the inner peace of knowing you improved the lives of others while you were at the top.

The Feeling of Resentment

Resentment is that bitter fire that burns inside, and is stoked everytime you feel betrayed. It can creep up when you see a supposedly “safe” investment tank, an irresponsible person become an “overnight success”, or a company you believed in be exposed for systemic corruption.

How Can Resentment Hurt Your Investments?

  • Setting Unachievable Goals: Resentment can cause you to set unrealistic financial goals. Risky shortcuts to success become more tempting because you feel “behind” in life, and that you need to make up for lost time.
  • Holding On to Losing Investments: Bitterness over bad investments can cause you to stubbornly hold on to them. But this only ends up hurting you and your financial future.
  • Arrogance: Resentment can breed arrogance, causing you to overestimate your abilities and ignore valuable insights from others. This overconfidence can lead to reckless risk taking and irreparable damage to your portfolio.

How You Can Handle It

+ Genuine Financial Gratitude: Find financial areas of your life where you’re truly grateful. Maybe that’s having no debt, a well-paying job, or simply a roof over your head. You’ll find that the sensation of gratitude and resentment are mutually exclusive.

+ Let Go of What No Longer Serves: Whether it’s a stock, mutual fund, life insurance policy, car payment, subscription, or other product that’s hurting you financially, it’s time to show yourself love. It’s time to let it go.

+ Give Yourself a Break: All humans are flawed. Even the most gifted financial minds make mistakes. It’s okay to feel upset, uncertain, and overwhelmed. But through interactions with the right people, you can learn to laugh things off and realize more of your potential.

How Snowpine Wealth Can Help Steady Your Course

At Snowpine Wealth, we know the power proper investing has to create financial stability and independence for our clients. But we’re also aware of the volatility of the marketplace and human emotions that come along for the ride.

Investing for retirement is a process that can feel overwhelming, especially for women who are navigating it on their own. But with the right support, you can take back a sense of control and steadily work towards a more secure future.

Don’t let intense emotions or a sense of isolation stop you from reaching out for help. You deserve to feel confident and secure in your financial destiny.

Ryan Smith is a CFP® Professional that’s been helping single women and retirees successfully navigate intense emotions and marketplaces for over 12 years. If you’re ready to put a plan in place to feel more secure, reach out to his office at 801-534-4463, or book your complimentary consultation call.

Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Advisor. Fixed insurance products and services not offered through Commonwealth Financial Network®.


https://onlinelibrary.wiley.com/doi/full/10.1002/brb3.497 https://www.statista.com/statistics/1115900/adults-with-anxiety-disorders-in-countries-worldwide- by-gender/


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