Uncertainty is an unchangeable condition of existence. As individuals, we can feel more or less uncertain, but that is a distinctly human phenomenon. Rather than ebbing and flowing with investor sentiment, uncertainty is an inherent and ever-present part of investing in markets.
“Doubt is not a pleasant condition, but certainty is an absurd one” — Voltaire
How does an individual best rationalise the investment market?
Managing Emotions & Staying in your seat
The management of emotion attempts to personify the market by ascribing the very real nervousness and fear witnessed and seen by individuals when market uncertainty increases. It is recognition of the fact that when markets go up and down, many investors struggle to separate their emotions from their investments. It ultimately tells us that for many investors, regardless of whether markets are reaching new highs or declining, changes in market prices can be a source of anxiety.
Times of uncertainty are times in which you must trust the education behind your portfolio, understand that uncertainty is part of investing, and stick to the plan that is agreed upon in advance and reviewed on a regular basis - only then are you able to establish a sense of rationality and confidence in volatility.
Managing your emotions at this time is crucial to strategic and successful investing.