Roey Hayon: "Investors should not let Coronavirus cloud their judgement"
By: Roey Hayon
Roey Hayon explains, "The behavioural immune system is a set of psychological tendencies that trigger individuals to avoid situations that make them sick. For investors, this motivates them to seek safety in the presence of danger and threats to their investment. However, the behavioural immune system can be so intense to cloud investors' decision-making with regards to their finances."
Predictably, many investors will make inappropriate decisions due to the susceptibility of the stock market to the pandemic. And as well as the downturn in trades and growth rate by 2% to 4.6%. Disease outbreaks such as this Coronavirus usually wreak more economic havoc and induce more market volatility than other disasters like wars and earthquakes.
"The behavioural immune system could act like smoke detectors that sound the alarm even when there is no cause for alarm. Although this type of trigger helps to set one up on the better side of preparation, it can also lead to the wrong direction as regards investment decisions," says, Roey Hayon.
How investors can think about their behavioural immune system
Roey Hayon highlights some of the signs of the behavioural immune system and how Investors can put these symptoms to check.
Herd behaviour symptoms: the behavioural immune system could trigger a partial or complete susceptibility to social conformity. For investors, this is pathetically bad because it makes them worried about the situation of things in the market. They tend to incline their decisions only towards the negative news about the outbreak and how it can drive losses on the market. To curb this, investors need to review their individual goals regularly.
Feeling of unsettlement:
Roey Hayon concluded, "For investors to stay atop of the market impacts of this Coronavirus outbreak, they should always review their financial goals and look beyond the present feelings of risk that could cloud their judgments."