When the economy looks bad, many investors make a huge mistake: they panic. As a result, they forget to look at the long run and often end up selling when they should be buying, or making other emotionally driven errors such as:
  • Purchasing an investment because it’s familiar (regardless of its financial worth)
  • Holding onto a once-positive investment longer than you should
  • Focusing on negative experiences (losing money) more than positive ones

And it is this latter mistake that so often rears its ugly head during a recession. All we can see are the numbers going down, and we forget to look at the big picture.

“There is a great expression in investing: the ‘little bulls and the bears make money and the pigs get slaughtered,’” says Hale Dwoskin, CEO and director of training of Sedona Training Associates. “Many of us, when it comes to investment decisions, are reacting emotionally to either what we'd like to be happening or out of fear of loss or fear of the overall economic conditions.”

In fact, 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 shouldn’t change anything. So why do we get so panicky?

“We are reacting either from lust or fear, and this is when we tend to make financial mistakes,” Dwoskin says.

This is why The Sedona Methodis 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.”