Psychology expert Louis Williams discusses emotional resilience in the face of market turmoil and explores how advisers can help build client confidence to ensure they stay invested during times of stress
We know, according to research, that someone's emotional state can strongly influence financial decisions they make. I want to explore how individual differences make investors more susceptible to either positive or negative emotions. In that light, I have been looking closely at an individual's emotional resilience or stability and their subsequent ability or strategy for regulating their emotions during difficult market periods. Mind the behaviour gap We might find that an individual or client has an attitude behaviour gap, whereby they are broadly risk-tolerant, but during diffi...
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