Don’t Let Your Emotions Control Your Finances

Don’t Let Your Emotions Control Your Finances Hilltop Wealth Solutions

If you’ve followed markets or financial news, especially in the past few years, you may have felt certain emotions when your portfolio makes a big jump or declines steeply. When markets keep going up, emotions can start to creep in and tell you to overweight your risky assets. It can start to feel like you’re leaving gains on the table by not rebalancing your portfolio to include the ultra-high growth assets that saw big jumps. The desire to get as much as you can from your assets is normal, but if you let it influence your decisions, you could end up risking more than you can afford to lose. In the event of pullbacks, you may see deep declines and might not have the time needed to benefit from a rebound.

The age-old saying, “past performance doesn’t indicate future results,” is all too true. Especially now, when we’ve seen the years of historic market gains seemingly come to an end, it comes as a reminder that markets don’t always go up, and the value of protection and safety in your retirement investments is of the utmost importance.

How To Avoid Emotional Investing

Emotional investing is a mindset that’s difficult to learn how to manage. It’s not as easy as reading a textbook and knowing what to do – it takes self-control. So, it’s important to keep your impulses in check with a clear plan that has dos and don’ts and avoid jumping at a hot stock tip or rebalancing your portfolio to make a bet on an asset you don’t fully understand. It’s okay to have risk exposure in your portfolio. But you should examine how much you are comfortable risking for the potential of large gains.

To mitigate the effects of emotions on your retirement portfolio, make sure your portfolio is properly diversified based on your risk tolerance. Portfolio diversity can be a key to achieving a balance between growth and safety.

Why Diversify Your Portfolio?

Essentially, portfolio diversity refers to a balance between high-risk, medium-risk, and low-risk assets across sectors, industries, asset classes, and strategies. For example, a retiree may allocate a portion of their portfolio to assets to high-growth technology stocks, while another portion of their portfolio is allocated to consumer staples stocks that pay dividends. You may also want to diversify across asset classes such as real estate or bonds. The more you diversify, the more protected you become against a downturn in the broad market or in one sector. You also don’t have to choose one or the other, which makes it a good way to address the emotions you feel when part of your portfolio is rising more than the rest, given that you can still allocate a portion of your portfolio to risk-tolerant assets.

There are plenty of ways to address emotional investing, and it’s encouraged to talk about how to avoid it with a financial professional. We focus on working with you to understand your unique financial situation and goals and turn that into an actionable strategy that can help you achieve the retirement you want. Talk to us today for a complimentary review to get started.


Hilltop Wealth Solutions (“Hilltop”) is a registered investment advisor with the Securities and Exchange Commission (“SEC”) and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. SEC registration does not imply a certain level of skill or training. Please refer to our Form ADV Part 2A disclosure for additional information regarding the qualifications and business practices of Hilltop. Hilltop Wealth Solutions, LLC is an SEC Registered Investment Adviser firm. Hilltop Tax Solutions, LLC, is an affiliate of Hilltop. Wealth Solutions that provides tax and bookkeeping services.

Website Disclosures

Hilltop Wealth Solutions (“Company”) is an SEC registered investment adviser located in Mishawaka, IN with branch office located in MI and other locations throughout IN.  The Company may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements.  The Company’s web site is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links.  Accordingly, the publication of the Company’s web site on the Internet should not be construed by any consumer and/or prospective client as the Company’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet.  Any subsequent, direct communication by the Company with a prospective client shall be conducted by a representative that is either registered or qualified for an exemption or exclusion from registration in the state where the prospective client resides.  For information pertaining to the registration status of the Company, please contact the SEC or the state securities regulators for those states in which the Company maintains a notice filing.  A copy of the Company’s current written disclosure statement discussing Company business operations, services, and fees is available by going online via the SEC’s Investment Advisers Public Disclosure (IAPD) database at www.adviserinfo.sec.gov, using SEC #801-115255.

The Company does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to the Company web site or incorporated herein and takes no responsibility, therefore.  All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by the Company, will be profitable or equal any historical performance level(s).

Certain portions of Company web site (i.e. newsletters, articles, commentaries, etc.) may contain a discussion of, and/or provide access to, the Company (and those of other investment and noninvestment professionals) positions and/or recommendations as of a specific prior date.  Due to various factors, including changing market conditions, such discussion may no longer be reflective of current position(s) and/or recommendation(s).  Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from the Company, or from any other investment professional.

The Company is neither an attorney nor an accountant, and no portion of the web site content should be interpreted as legal, accounting or tax advice.

Rankings and/or recognition by unaffiliated rating services and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if the Company is engaged, or continues to be engaged, to provide investment advisory services, nor should it be construed as a current or past endorsement of the Company by any of its clients.  Rankings published by magazines and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser.  Rankings are generally limited to participating advisers.

To the extent that any client or prospective client utilizes any economic calculator or similar interactive device contained within or linked to the Company web site, the client and/or prospective client acknowledges and understands that the information resulting from the use of any such calculator/device, is not, and should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from the Company, or from any other investment professional.

Each client and prospective client agrees, as a condition precedent to his/her/its access to the Company web site, to release and hold harmless the Company, its officers, directors, owners, employees and agents from any and all adverse consequences resulting from any of his/her/its actions and/or omissions which are independent of his/her/its receipt of personalized individual advice from the Company.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.