Newsletter • Quarter 1 • 2026
Understanding investor behaviour
Markets are not only driven by facts and numbers but also by human behaviour.
When markets rise or fall sharply, investor emotions can influence prices just as much as economic events. It is normal to feel uncertain when markets move quickly or when new events dominate the headlines. At times like these, some investors react emotionally rather than focusing on the long‑term.
Common emotional reactions
Two emotions often affect investment decisions during changing markets – ‘Fear of Missing Out’ (FOMO) and the ‘Fear of Loss’ (FOL).
Understanding these behaviours can help you stay grounded, especially when markets are changing or feel unpredictable.
These emotions can lead to:
- Chasing investments that have quickly risen in value.
- Increasing risk exposure in search of quick investment growth.
- Selling when markets fall in the short term.
- Avoiding investments because they feel uncertain or unpredictable. Excessive focus on avoiding loss can hinder long‑term investment growth.
Why this matters for you
Long‑term success comes from having a well‑designed investment strategy – and sticking to it.
Ignore short-term changes.
A long-term approach helps your retirement savings grow.