In this episode, Acquania Escarne and I discuss Vanguard’s coronavirus market volatility research report which found that although trading among U.S. individual investors increased during the pandemic, the majority are “staying the course” and not trading in response to the market decline.
In this episode learn why it’s important to stay consistent in your investment strategy, especially if you’re a long-term investor and why you should leave your emotions out of the decision making process.
Acquania Escarne is a financial coach, freelance blogger, and podcaster committed to helping people find financial freedom and leave a legacy behind for their families. She recently launched The Purpose of Money, a podcast for women focused on building generational wealth.
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- Between February 19th and March 20th, 2020 trading among Vanguard’s individual investors increased.
- 8% of U.S. households made trades, but half of those only made one trade. Majority moved money into equities (stocks, mutual funds, etc) rather than fixed income (bonds and cash).
- More than 90% of U.S. individual investors “stayed the course” and did not trade in response to the market decline.
- Households with the highest balances moved away from equities.
- Older and wealthier households sold their positions, while the typical trader “bought on the dip”.
In this episode we cover:
- Potential reasons for why my most people did not trade in response to the market decline.
- Understanding your risk tolerance.
- Why having an investment strategy is important.
- Why you should leave your emotions out of the decision making process.
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Also, check out this blog post where I share the most common investment terms you should know about.