What to Do When the Stock Market Falls

Left unchecked, investors’ behavioural biases lead them to make irrational decisions, such as buying when a market is expensive

Dan Kemp 20 April, 2018 | 8:36AM

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To seek protection? Or to stay fully invested? That is the question… Whichever way you look at it, the nine-year bull market has got many investors thinking. And it is at these moments of inflection that behaviour can have its greatest influence on markets.

This behaviour is paramount and directly linked to Warren Buffett’s maxim to “be greedy when others are fearful and fearful when others are greedy”. Left unchecked, investors’ behavioural biases lead them to make irrational decisions, especially buying when a market is expensive, as well as selling when it’s cheap.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Dan Kemp

Dan Kemp  is Chief Investment Officer, Morningstar Investment Management EMEA

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