Stressed About the Election? Don't Take It Out on Your Investments

[Mike B 625]

By Paul Sullivan (NYT)

Here’s an election prediction you can take to the bank: Whenever the count is over and no matter who wins the presidency, tens of millions of people are going to be elated and millions of others are going to be despondent.

But regardless of the emotion driving them, people acting in the heat of the moment may make decisions about their personal finances that prove costly.

While those decisions often seem irrational in hindsight, they’re completely predictable to people who study behavioral finance, the branch of economics that aims to understand how emotions affect financial choices. In many circles, it has supplanted the traditional economic view that people are rational actors who look to maximize gain and minimize loss. Instead, behavioral finance concedes that most people are prone to being fallible and foolish.

https://www.nytimes.com/2020/10/30/your-money/election-investments.html?referringSource=articleShare