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Donīt Overreach with Your Investments in a Recession: Hereīs How to Avoid It

Corinne Casazza
June 23, 2008
When the economy looks bad, many investors make a huge mistake: they panic. As a result, they forget to see the big picture and often end up selling when they should be buying, or making other emotionally driven errors such as:



  • Making an investment because itīs familiar (regardless of its financial worth)

  • Holding onto an investment longer than you should


  • Focusing on negative experiences (losing money) instead of positive ones


    • This last mistake very often rears its ugly head during a recession. All we can see are the numbers going down, and we forget to look at our investments as a whole.

    "There is a great expression in investing: the īlittle bulls and the bears make money and the pigs get slaughtered,ī" says Hale Dwoskin, CEO and Director of Training at Sedona Training Associates. "When it comes to investment decisions, many of us are reacting emotionally to what we'd like to be happening, or out of fear of loss or fear of the overall economic conditions."

    A recent survey of 500 high-net-worth Baby Boomers conducted by Bell Investment Advisors, found that 23 percent planned to change their investment strategy in response to a potential recession. More specifically, they were planning to:



    • Invest in more conservative investments such as money market funds (37%) and bonds (32%)


    • Invest in more stocks or stock mutual funds (21 percent)


      • "Unfortunately, these investors are actually putting their retirement at greater risk, since bonds and money-market funds have trouble keeping pace with inflation," said Jim Bell, founder and president of Bell Investment Advisors in Business Wire.

      "Bonds and cash have the false allure of 'safety' since their principal fluctuates less than that of equities, but equities, along with commodities, will better allow boomers to maintain their standard of living over decades."

      Financial experts unanimously agree: if you felt good about your financial strategy before a recession, then the recession shouldnīt change anything.

      So why do we get so panicky?

      "We are reacting either from lust (wanting things to be different) or fear, and this is when we tend to make financial mistakes," Dwoskin says.

      This is why The Sedona Method is a KEY investment tool for anyone who wants to be successful financially. The Method allows you to release your fears and clear your mind and heart so that you're able to make the right investment choices for you.

      "If you allow yourself to release the emotions that arise as you prepare to make investment decisions, you will find that you more easily tap your clear reasoning and intuitive knowing," Dwoskin says. "This will result in better investment decisions every time."

      "The more you get comfortable releasing when making investment decisions, the better your decisions will become," he continues. "Knowing how to release during financially challenging times is literally a lifesaver."

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Corinne Casazza

Corinne Casazza is the Web Master for The Sedona Method, a body of emotional releasing techniques originated by Lester Levenson in the 1970s. Three decades later, Hale Dwoskin carries on Lester's work. Hundreds of thousands of people worldwide have had their lives transformed by The Sedona Method. You can too.

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