Plenty of consumers have made or routinely make impulse buys but when it comes to buying stocks investors typically want to give their purchases a little more thought.
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But that doesn't always happen, given the most recent MagnifyMoney survey finds 66% of investors have regretted an impulsive or emotionally charged investing decision.
Emotions can certainly play a role in major financial decisions such as buying a house or paying for college, but more calculated, logical decisions not based on fleeting feelings might be a better investment strategy. MagnifyMoney researchers surveyed more than 1,100 investors to see if they let emotions influence their portfolios.
66% of investors have made an impulsive or emotionally charged investing decision they later regretted. This is more common for Gen Zers (85%) and millennials (73%) than Gen Xers (60%) and baby boomers (54%).
32% of investors have traded while drunk. This includes 59% of Gen Z investors who have bought or sold an investment while inebriated — more than any other age group
Consumers who manage their portfolios generally have a harder time keeping emotions out of investing than those who rely on a financial advisor. Those who self-manage their investments report higher rates of lost sleep and regrettable decisions than those who use an advisor.
Most investors (58%) agree their portfolio performs better when emotions are left out of the equation, but that's easier said than done. Nearly half (47%) report difficulties keeping emotions out of investing decisions.
37% of investors have lost sleep worrying about the stock market, and 30% have cried over investing. The top reasons for tears include losing money in the stock market (43%), feeling overwhelmed (36%) and selling too early (34%).
The stock market swings can be devastating to investors, particularly when a bad day on Wall Street can be a prelude to a long-term crisis. In general, 3 in 10 investors report having cried over investing, and many of those tears came after a loss. ■