by KYW's Salil Gutt
In his column in the Wall Street Journal, Jason Zweig made some interesting points. He talked about the "ostrich effect."
This term was coined by Professor George Lowenstein of Carnegie Mellon University. The ostrich effect is the tendency for investors to stick their heads in the sand during lousy markets. So investors check their investment accounts far less often during bad periods compared to a higher frequency when things are going swimmingly. Investors generally want to capture pleasure and avoid pain.
Here are some words of wisdom from that column.
First. Look ahead. Commit to checking your investments on a specific date. If necessary sell or rebalance your portfolio at that time.
Continue to follow the market news, not run from it.
And finally. The time to buy is when there is the proverbial blood on the streets. Easier said than done but being a contrarian tends to yield higher returns in the long run.
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