THE INVESTOR MINDSET

Why does investing require a specific mindset, so that I may be prepared for the long road ahead of me?

According to experts at Morningstar, the mutual fund analytical research company, investing requires a certain mindset in order for you to reach your long-term goals. It suggests that you try not to overreact to the various ups and downs of market cycles. According to Morningstar, when the news is spreading about a possible increase or decline in various markets with which our investments may be correlated, when the talk on the street is all about the financial markets, this is precisely the wrong time to sell or buy equity investments. Morningstar further suggests that you stay on track to hit your long-term goals, and try to develop the discipline to keep to your long-term financial investing performance goals.

Why am I so important when it comes to investing success?

Morningstar further reports that we tend to give an inordinate amount of attention to our investments themselves: what they are, what their returns have been, how well the company is doing. We seem to forget that the buying and selling of these investments depends strictly on our own behavior and emotional state at the time we buy and sell. If you extrapolate this sentiment to millions of investors, you can begin to see how each investor's individual attitudes and behaviors may shape and form the markets in which you invest, as well as your own performance within these markets.

What did experts at BlackRock—the world's largest global asset management company, serving both large institutional investors and individual investors—find in their landmark 2013 study of investor attitudes?

BlackRock, along with the private research firm Cicero, surveyed approximately 17,600 investors from 12 countries to try to gauge the pulse of the investment community. From this initial survey, BlackRock polled 4,000 investors and 500 financial professionals to analyze the U.S. investment community. Their survey concluded several themes, including: investors' concern about their financial futures; more reluctance to invest and wish to preserve cash; a knowledge gap when it comes to evaluating opportunities to generate income; tightness on household income; and widespread fears about meeting retirement goals.

 
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