Are You at the Right Risk Level?

Here is the article.

At times of market volatility, some investors flee to cash, which they perceive as being safe. Cash, however, doesn't keep up with inflation and can erode future spending power if held in large amounts.

But a bad investment decision can easily be rationalized.

For example, people tend to believe that recent events will continue into the future. That phenomenon, known as recency bias, affects investments. It's what causes people to shuffle portfolio holdings in reaction to recent conditions rather than simply sticking to a predetermined plan.

A stampede into cash or a hasty swap of assets may feel good in the short term, but these actions have long-lasting detrimental effects.

"Sometimes investors can be susceptible to recency bias that can make them their own worst enemies by reacting to the story of the day," 

Investors should keep their eye on the long term rather than trying to time the market or chase performance.

Actionable Items

I like to work on my English vocabulary. 

flee to cash

perceive as being safe

Cash, however, doesn't keep up with inflation

a bad investment decision can easily be rationalized

recent events will continue into the future

recency bias, affects investments

As an investor, I should keep my eye on the long term rather than trying to time the market or chase performance.